The United States Trade Representative (USTR) has published a report accusing China of unfair practices that undermine American businesses and deny US workers commercial opportunities in the shipbuilding sector.
Katherine Tai, Ambassador at the USTR, emphasised the impact of China’s dominance in shipbuilding on American industries.
“Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalisation of US industries, as well as the communities that rely on them,” said Tai.
The report highlights the stark decline of the US shipbuilding industry. Once a global leader, the US built 70 ships annually in 1975. Today, the country produces only five ships per year, compared to China’s staggering 1,700 ships.
Published on January 16, the report states, “PRC’s targeting for dominance is unreasonable because it displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on the PRC, increasing risk and reducing supply chain resilience.”
The USTR noted that much of US trade is now carried out using Chinese-built vessels financed by state-owned Chinese institutions and operated by Chinese shipping lines.
The report was prompted by a petition from five national labor unions, filed on March 12, 2024, which called for an investigation into China’s practices in the maritime, logistics, and shipbuilding sectors.
China’s dominance in shipbuilding is a relatively recent phenomenon. In 1975, Japan was the leading global shipbuilder, only to be surpassed by South Korea later in the 20th century. China overtook South Korea around a decade ago, cementing its position as the world’s largest shipbuilder.
The professionalisation of China’s shipyards has played a significant role in this rise. Since the late 2000s, the Chinese government has implemented reforms to improve worker conditions, training, safety measures, and energy efficiency, while also providing pensions and other benefits. These improvements have enhanced the quality of China’s shipbuilding capabilities.
The USTR, responsible for negotiating trade agreements and resolving disputes, has flagged Beijing’s practices as a key barrier to restoring US industrial competitiveness and protecting the communities reliant on shipbuilding.
The report underscores the urgency of addressing what the USTR describes as a serious economic security risk to the United States.
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