Republican and Democratic US lawmakers for years have warned about China’s growing dominance on the seas and diminishing US naval readiness.
Senators Mark Kelly, a Democrat, and Todd Young, a Republican, welcomed the executive order and said they would reintroduce their bipartisan legislation to provide the congressional authorisations needed to revitalise the industry.
The order directs the US trade representative to move ahead with a proposal that included levying million-dollar US port docking fees on any ship that is part of a fleet that includes Chinese-built or Chinese-flagged vessels. Allies will be pushed to act similarly.
USTR’s recommended port fees had sparked sharp criticism from commodities exporters, trade groups and US ship operators, who warned of supply chain disruptions, job losses in port cities and inflation. The order must be finalised by an April 17 deadline.
US trade representative Jamieson Greer on Wednesday said USTR should have a final decision on remedies by middle of the month and repeated his comments from Tuesday, saying that not all of the measures outlined by the agency’s original proposal would be implemented.
“This could have been a miscommunication issue, some people thought that all of those measures would be imposed,” Greer said. But, after feedback and public comments, “now we consider which of those measures is most appropriate.”
The order also requires USTR to consider proposing tariffs on ship-to-shore cranes manufactured, assembled, or made using components of Chinese origin, or manufactured anywhere in the world by a company owned, controlled, or substantially influenced by a Chinese citizen, as well as tariffs on other cargo handling equipment.
The executive order further requires the department of homeland security to enforce collection of harbor maintenance fees and other charges, and to prevent cargo carriers from circumventing those fees by routing goods to ports in Mexico and Canada and then sending cargo into the US via land borders.
Asked about the US order on Thursday, China’s foreign ministry said the idea that China was to blame for the US losing its competitive advantage in the shipping industry had no basis in fact.
“The development of China’s shipbuilding industry is the result of technological innovation and active participation in market competition by enterprises,” ministry spokesperson Lin Jian told a regular press conference.
Trump, speaking in the Oval Office, said the US would be spending “a lot of money on shipbuilding” to restore American capacity in the sector.
“We’re way, way, way behind,” he told reporters. “We used to build a ship a day, and now we don’t do a ship a year, practically, and we have the capacity to do it.”
The order said recent data showed the US built less than 1% of commercial ships globally, while China built about half, an increase from just 5% in 1999, according to the Center for Strategic and International Studies.
Trump’s order called for creation of a Maritime Security Trust Fund to provide reliable funding for programs aimed at shoring up US maritime capacity, including consideration of potential new or existing tariff revenue, fines, fees, or tax revenue.
It also calls for incentives to encourage private investment in construction of commercial components, and improvements to shipyards, repair facilities and dry docks.
The US shipbuilding industry, which peaked in the 1970s, has struggled due to high costs and a complex regulatory structure, which has enabled rivals including China to grow rapidly.