The USTR believes that China’s shipbuilding dominance is harming the US, Reuters reports
By Andrea Shalal and David Lawder
WASHINGTON (Reuters) – The office of the U.S. Trade Representative said on Thursday it had found China’s targeted dominance of the global shipbuilding, maritime and logistics sector to be “unreasonable” and “subject to action” under U.S. trade law.
The findings of the USTR investigation, first reported by Reuters on Tuesday, did not include specific recommendations on penalties against Beijing, leaving the next steps up to President-elect Donald Trump, who takes office on Monday.
The USTR said its report “supports the determination that China’s targeting of the maritime, logistics and shipbuilding sectors for dominance is unreasonable and burdens or restricts US trade and is therefore effective.”
The Chinese Embassy in Washington could not immediately be reached for comment on the investigation.
U.S. Trade Representative Katherine Tai launched the investigation in April 2024 at the request of the United Steelworkers and four other U.S. unions under Section 301 of the Trade Act of 1974, which allows the U.S. to punish foreign countries that engage in actions that are “unjustified.” or “unreasonable,” or they burden American commerce.
Section 301 is a law that has been used by both Trump and President Joe Biden to impose high tariffs on Chinese imports since 2018.
Tai said in a statement that the US commercial shipbuilding sector has fallen to less than five ships a year from 70 in 1975, while China now builds 1,700 ships a year.
“Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases risks to economic security, and is the biggest obstacle to the revitalization of American industries and the communities that rely on them,” Tai said.
“These Section 301 disclosures lay the groundwork for immediate action to invest in America and strengthen our supply chains,” she said.
The report found that China’s push to dominate the shipbuilding, maritime and logistics sectors resulted from Beijing’s “extraordinary control” over companies in the sector and denied market-oriented companies commercial opportunities. This in turn reduces competition and increases dependence on China.
Chinese sectors benefit from China’s lack of effective labor rights, overcapacity in steel production and control over digital logistics services, the report said.
US Senator Mark Kelly said the report illustrates the need to revitalize America’s shipbuilding and maritime industries, including through his legislation to achieve this.
“The PRC’s unfair trade practices enable China to dominate the oceans while harming American workers and our national security,” Kelly said, using an acronym for the People’s Republic of China.