Trump plans executive order to strengthen US shipbuilding, blunt China domination

LOS ANGELES/WASHINGTON – The US plans to levy fees on imports arriving on Chinese-made ships and offer tax credits to resuscitate domestic shipbuilding and reduce China’s grip on the US$150 billion (S$200 billion) global ocean shipping industry, a White House document seen by Reuters shows.

President Donald Trump is drafting an executive order that would also establish a Maritime Security Trust Fund as a dedicated funding source and create shipbuilding incentives through the use of tax credits, grants and loans, according to a draft fact sheet of the 18-point plan.

“The White House is standing up an office at the National Security Council to lead a whole-of-government effort to strengthen the maritime industrial base,” the document said, following Mr Trump’s announcement of the plans during an address to Congress on March 4.

The Republican president’s initiative won rare praise from Mr Jake Sullivan, national security adviser to former President Joe Biden, who said decades of unfair trade practices by China had negatively affected US commercial and military shipbuilding.

“American shipbuilding is critical to protecting our national and economic security. Now is the time to act – to address the impact of China’s policies and to replenish American maritime capacity and power,” Mr Sullivan told Reuters.

Republican and Democratic US lawmakers for years have warned about China’s growing dominance on the seas and diminishing US naval readiness.

The pending executive order appears to be influenced by existing proposals, including legislation with bipartisan backing.

Mr Trump’s initiative comes two months after the Biden administration completed a nearly year-long probe, requested by United Steelworkers and other unions, which concluded that China uses unfair policies and practices to dominate the sector.

Mr Michael Wessel, president of the Wessel Group, who helped coordinate that investigation under Section 301 of the Trade Act of 1974, called Mr Trump’s announcement an encouraging step forward after years of efforts by unions to revitalise the industry.

“We can still be the industrial leaders of the world – but only if we act,” he said. “Now is the time for Trump to turn words into action and follow through on his commitments.”

National Security Adviser Mike Waltz, a former House Republican from Florida, in 2024 introduced a Bill with Democratic Senator Mark Kelly from Arizona to reinvigorate commercial and military shipbuilding in the US.

The US Trade Representative’s office in February proposed charging up to US$1.5 million for Chinese-built vessels entering US ports as part of its probe of China’s growing domination of the global shipbuilding, maritime and logistics sectors. The proposal caused a

sell-off in the shares of Singapore-listed Yangzijiang Shipbuilding

last week.

Mr Trump on March 4 hailed an unrelated deal led by US firm BlackRock to buy most of the US$22.8 billion ports business of Hong Kong conglomerate CK Hutchison.

The deal will give the US consortium control of key Panama Canal ports amid White House calls to remove them from what it says is Chinese ownership.

“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Mr Trump told the US Congress.

That BlackRock announcement followed February’s reintroduction of bipartisan legislation that would require the Secretary of State and the Secretary of Defence to develop a strategy to monitor China’s efforts to build, buy or own strategic ports.

Other measures in the draft document would direct technopreneur Elon Musk’s Department of Government Efficiency to review government procurement processes, including at the US Navy; increase wages for nuclear shipyard workers; and develop a security strategy for the Arctic.

REUTERS