As China continues pouring billions of dollars into its maritime industry each year, the United States has a difficult but viable path to start closing the chasm between the nations’ respective shipbuilding prowess.
That was a key point delivered by Michael Wessel at the Maritime Trades Department (MTD) meeting on April 25 in Washington, D.C. Wessel serves on the U.S.-China Economic and Security Review Commission. In that capacity and others, he has worked with the MTD and its affiliates for nearly a half-century.
“Your union leadership understands very well what it meant to allow China into the World Trade Organization and the devastating impact it had not only on workers’ interests around the globe, but human rights and national security,” Wessel told the board. “We have been working together over many years to try and address those challenges.”
He continued, “China has made clear … that in maritime logistics, shipbuilding, it wants to dominate global commerce…. So, we have drafted the petition alongside MTD and others to try and address some of these challenges. You well know the breadth of these issues. It includes tens of billions of dollars of subsidies.”
He described the imbalance between China’s shipyards and U.S. facilities, pointing out that in 2023, the U.S. built 10 oceangoing vessels compared to 1,000 produced in China.
“As China’s shipyards continue to expand, last year they accounted for over 47% of the new builds (worldwide) and 55% of all orders,” Wessel said.
He added that U.S. Navy Secretary Carlos Del Toro recently said China has more than a dozen shipyards with more capacity apiece than all of the U.S. major yards combined.
“And you’ve all heard about Chinese involvement in ship to shore cranes and how they are able to use not only surveillance but potentially denial of service opportunities to shut down cranes at all ports,” Wessel said. “And that’s a major security threat as well. In addition, just for the national security area, the last three dry docks purchased by the U.S. Navy to repair and maintain their ships were purchased from the Chinese. No ships in the Maritime Security Program or Transportation Security Program were built in U.S. yards, and the last three ships for the MSP are all built by Chinese shipbuilders.”
In light of these considerations, the MTD and other labor organizations recently teamed up and filed a petition with the United States Trade Representative (USTR). After reviewing the filing, the USTR is initiating an investigation of acts, policies, and practices of the People’s Republic of China (PRC) targeting the maritime, logistics, and shipbuilding sectors for dominance.
“It’s close to a 5,000-page petition,” Wessel noted. “It outlines a broad range of Chinese policies and practices that undermine our national and economic security. But the real question is, what do we do about it? The remedy that is proposed in the petition is a fee per ton on Chinese-built vessels entering a U.S. port that will be tonnage- and age-based…. As time proceeds, those fees will go up to try and deter foreign shipping lines from utilizing the ships as we seek to expand U.S. capacity to build them. The revenue from such a fee would be used to support a U.S. commercial shipbuilding restoration fund, which would be available to the shipbuilders as well as to the supply base – and most importantly, to make sure that we are able to train the workers that are needed throughout this throughout this supply chain.”
Other measures in the petition aim to encourage transporting liquefied natural gas on U.S. bottoms with U.S. mariners, and strengthen the Jones Act.
Wessel noted President Biden’s strong support of the petition. Responding to the filing, Biden said, “As long as I am president, I’ll fight for U.S. workers and jobs.”