The Biden administration has determined that China employs “unfair policies and practices” to dominate the global shipbuilding, logistics, and maritime sectors, according to three sources familiar with the findings of a months-long trade investigation.
The U.S. Trade Representative (USTR), Katherine Tai, initiated the investigation in April 2024 following a petition from the United Steelworkers and four other U.S. unions. The probe was conducted under Section 301 of the Trade Act of 1974, which allows the U.S. to impose penalties on foreign nations engaging in practices deemed “unjustifiable,” “unreasonable,” or detrimental to U.S. commerce.
Investigators found that China specifically targeted the shipbuilding and maritime sectors for global dominance. They concluded that the country utilized “financial support, barriers for foreign firms, forced technology transfer, intellectual property theft, and procurement policies” to bolster its competitive edge, according to one source who spoke on the condition of anonymity. The report also highlighted that Beijing “severely and artificially suppressed China’s labor costs in the maritime, shipbuilding, and logistics sectors,” the source added.
Although the findings have not been officially confirmed or denied by U.S. officials, they come at a time of growing competition between the two largest economies and as Washington seeks to reduce reliance on Chinese manufacturing and supply chains by rallying allied nations.
Shipyards in Asia, including those in South Korea and Japan, may see some benefits if penalties are imposed on China’s shipbuilders. However, analysts and a senior executive from a major Chinese shipbuilding firm noted that China’s shipbuilding industry, due to its sheer scale and cost advantages, remains robust enough to withstand such measures in the short term.
According to the data cited by the US probe, China’s share of global shipbuilding has expanded to over 50% in 2023.
“China’s shipbuilders have overtaken the Japanese and the Koreans and everyone under the sun,” said James Chin, a professor of Asian studies at the University of Tasmania.
Chin added that Chinese shipbuilders are “safe in the near term – up to roughly 24 months – from any measures that the U.S. might take.”
