US
politicians want to revive the country’s shipbuilding industry with both
incentives and mandates on cargo.
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.”