The United States targeting Chinese-made goods as part of its supply chain localization and trade war strategies is expected to affect China’s shipbuilding industry after the Chinese semiconductor industry.
According to the Financial Times (FT) and other foreign media outlets, U.S. President Joe Biden posted on his social media service (SNS) X page on March 12 (local time) that some unions, including United Steelworkers (USW), have submitted a petition regarding shipbuilding. “I will always stand up to China’s unfair practices and will fight for American workers and jobs as long as I am U.S. President,” Biden emphasized. “The United States Trade Representative (USTR) will thoroughly review this petition in accordance with law.”
On the same day, USTR Katherine Tai also announced that five U.S. labor organizations, including the USW, filed a joint petition. They called on the USTR to investigate Chinese government’s policies and practices in the maritime, logistics and shipbuilding sectors.
In their petition, the five labor unions argued that the U.S. commercial shipbuilding industry led the world in 1975 and that the biggest obstacle to the US shipbuilding industry’s recovery is unfair trade practices of China, the world’s largest shipbuilder.”
The labor unions said the Chinese government discriminates against U.S. ships and shipping companies by dumping in the shipbuilding, maritime, and logistics industries, and then securing ports and logistics facilities around the world.
The petition was filed under Section 301 of the U.S. Trade Act. Section 301 of the U.S. Trade Act authorizes the U.S. government to respond to unreasonable or discriminatory practices of foreign governments that restrict or impede the United States’ trade. Once the USTR receives a petition, it has 45 days to review its contents and decide whether or not to launch an investigation.
The labor unions’ criticism of China was driven by a sense of crises over the loss of American jobs to Chinese companies. USW President David McCall pointed out that U.S. steel mills are currently operating at only 70 percent capacity. “If we can get the mills running at higher rates for shipbuilding and the infrastructure to support shipbuilding, we will be able to get additional profits out of more of our facilities and that means more jobs,” McCall told the Financial Times.
U.S. shipyards’ share of commercial vessels was the biggest in the world in 1975, but it now ranks 19th, or less than 1 percent of total global production. As of 2022, the world’s top shipbuilder was China, with 46.59 percent of total production. South Korea came in second (29.24 percent) and Japan third (17.25 percent).
U.S. Secretary of the Navy Carlos Del Toro recently reached out to officials in Korea and Japan to encourage shipbuilders to expand their North American operations. Del Toro also visited Korea and took a tour of shipyards of major Korean defense companies in February.