Posted on January 27, 2025
Amid the hue and cry in the Washington for tariffs to be levied against China due to its trade imbalance President Trump is also targeting claimed influence in the Panama Canal and its dominance in shipbuilding and the wider maritime sector.
Katherine Tai the Ambassador at the US Trade Representative said: “Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalization of US industries, as well as the communities that rely on them.”
A cross-party group of senators is now acting on these insecurities by looking to challenge China’s dominance and the politicians are proposing widespread investment to reignite the US maritime industry. The SHIPS for America Act aims to revitalise US shipbuilding in particular which would drive developments and be supported by commercial maritime industries, in a symbiotic relationship.
Democrat Senators John Garamendi and Mark Kelly have been joined by Republican Senators Todd Young and Trent Kelly in their bid to revive America’s maritime fortunes.
“For far too long, the United States neglected our maritime industries and the critical role they play in our national and economic security – this ends with the SHIPS for America Act,” said Garamendi, “This bill represents the most substantial and comprehensive approach to have America compete and lead globally.”
The SHIPS for America Act will incorporate other legislation Justice for Victims of Foreign Vessel Accidents Act, Rebuilding the United States-Flag International Fleet Act, Federal Ship Financing Improvement Act, Energizing American Shipbuilding Act of 2023 and the Maritime Fuel Tax Parity Act. All of this legislation is still making its way through congress.
In general, the overarching SHIPS for America Act, will target supporting US shipyards to develop and build ships with the financial support and the training of shipyard workers through a maritime recruitment campaign.
A 25% investment tax credit will encourage investment in shipyards for both military and commercial vessels, while the title XI Federal Ship Financing Program will become a revolving fund and the Act proposes the establishment of a Shipbuilding Financial Incentives program that would support domestic shipbuilding and ship repair.
In further support of US shipbuilding Government would mandate that all government-funded cargo is moved by US flagged vessels, and that a proportion of commercial goods imported from China will also be transported on US registered ships from 2029.
Currently the only reason that owners order newbuildings at US yards is to comply with cabotage laws under the Jones Act, which requires US-built vessels, crewed by American seafarers, to carry domestic cargo. Vessels built at US yards are multiple times more expensive than those constructed in North Asian yards and require much longer lead times.
A raft of other measures will support the development of training and education programmes, the development of the US Coast Guard and the US register by adding 250 ships built at US yards to the US flag within 10 years.
Backing for the bill is widespread among US military and commercial maritime stakeholders, with the American Maritime Congress (AMC) saying it “enthusiastically supports” the bill.
AMC President Fair Kim said the legislation is, “A cornerstone of our nation’s future national and economic security, “ he added, the bill “is a historic opportunity for our great nation to once again prosper while increasing national security.”
