Report: Trump Seeks Allies Support to Penalize Chinese Shipbuilding

The Trump administration is reported to be building out its plans to penalize China for its subsidy of the shipbuilding industry by seeking international support while also linking it to the rebuilding of U.S. shipbuilding and breaking China’s monopoly on cargo cranes. Reuters and The Wall Street Journal have seen drafts of executive orders proposed to Trump that follow up on the recommendations of the U.S. Trade Representative’s Office and the announced White House office on shipbuilding.

Speaking to the U.S. Congress on Tuesday night, Trump said, “We used to make so many ships. We don’t make them anymore, very much. But we’re going to make them very fast, very soon.”

The Trade Representative in the last days of the Biden administration concluded an investigation into China’s shipbuilding policies. The report called for steps to reign in China’s unfair advantages in shipbuilding which it concluded were built through government subsidies and policies. Unconfirmed reports recently said the Trump administration had taken the Biden report and was looking at fees on shipping lines using Chinese-built ships and calling at U.S. ports.

In an exclusive report from Reuters, it said it has seen a draft of the executive order proposing fees on all ships entering U.S. ports from carriers that have Chinese-built ships in their fleets. The fees would be regardless of where the individual ship was built or registered.

"The national security and economic prosperity of the United States is further endangered by the People's Republic of China's unfair trade practices in the maritime, logistics, and shipbuilding sectors," the draft order says according to Reuters.

It highlights that the draft changes from the previous reports in that it widens the potential number of ships subject to the fees. It does not say how the fees would be calculated but drops previsions that limited the fees to fleets with 25 percent or more of the ships on order or for delivery from China.

The draft order according to Reuters also calls on the U.S. to “engage allies and partners” to enact similar fees. According to Reuters if they did not support the U.S. they could “risk retaliation,” which is emerging as one of the Trump administration's bargaining tactics. Retaliation has become a key piece of the emerging trade war and tariffs and Trump’s report that on April 2 the U.S. will enact reciprocal tariffs on any nation that imposes tariffs on U.S. goods.

The report highlights that the sweeping fees would reach beyond the major Chinese carriers including COSCO and its subsidiary Orient Overseas Container Lines (OOCL). By including all fleets with Chinese-built ships, it would impact all the major carriers including MSC Mediterranean Shipping, Maersk, CMA CGM, and others.

The draft also links to the separate issue that emerged over Chinese cargo-handling equipment according to Reuters. During the Biden administration, the dominance of China’s ZPMC (Shanghai Zhenhua Heavy Industries Company) was highlighted and accusations emerged that China controlled the cranes or was using them to spy on the United States. Biden moves to place tariffs on the large cranes used by ports to load and unload containers and to reshore a U.S. capability to build large cargo cranes.

Additional tariffs would be imposed on Chinese-made cargo equipment according to Reuters’ review of the draft executive order.

The draft on the response to Chinese shipbuilding subsidies comes after The Wall Street Journal reported the White House was also working on a sweeping executive order for the shipbuilding industry. It reportedly will order Elon Musk’s Department of Government Efficiency to review procurement as it relates to shipbuilding and proposes raising wages for shipyard workers involved with nuclear shipbuilding.

Trump during his meeting at the White House on Thursday with Chairman and CEO of CMA CGM Group Rodolphe Saadé alluded to major steps coming soon in the shipbuilding and shipping industries.