For decades, the American shipbuilding industry has been virtually nonexistent, a shadow of its former self. Once a global powerhouse that could produce over 2,000 ships per year during World War II, U.S. shipyards now account for a mere 0.13% of the global commercial shipbuilding market. High labor costs and increased foreign competition were the most pressing reasons for shipbuilding’s exodus from North America, but lack of government support may have been the decisive factor.
This is JP Hampstead, co-host of the Bring It Home podcast with Craig Fuller. Welcome to the 12th edition of our newsletter, in which we ask American shipyards to build, baby, build. The USS Hancock (CV-19), the Essex-class aircraft carrier my father served on during the Vietnam War, was laid down on Jan. 26, 1943, and launched less than a year later, on Jan. 24, 1944, in time to take a kamikaze strike off Okinawa, Japan, the next year.
The U.S. built 24 Essex-class carriers during World War II (an average of one every two months for four years); now it takes the United States a decade to commission a new Gerald R. Ford-class aircraft carrier after laying down its keel. These ships are nuclear-powered and more technologically sophisticated, and they account for far more firepower than the old Essex-class, but that alone doesn’t explain the disparity in construction timelines.
Back to our story.
As American shipbuilding waned, other nations stepped in to fill the void. China has emerged as the dominant force, attracting 59% of new shipbuilding orders in 2023 – double that of its closest competitor, South Korea. Together with Japan, these three Asian nations now control over 90% of the global commercial shipbuilding market. Their success stems from a combination of government subsidies, lower labor costs — although that’s certainly less of a factor in Japan and South Korea — and strategic investments in modernizing shipyard infrastructure.
As should be clear by now, the decline of America’s shipbuilding capacity is more than just an economic concern – it poses significant challenges to national security and industrial resilience. A robust domestic shipbuilding industry is crucial for maintaining a strong Navy and merchant marine fleet, both of which are vital for projecting power globally and ensuring the security of maritime trade routes. The U.S. Navy’s most recent 30-year plan calls for the construction of 290 to 340 new ships by 2053, a tall order for an industry operating at reduced capacity.
Shipbuilding serves as a cornerstone of the broader maritime industrial base, supporting a wide range of ancillary industries and high-skilled jobs. For every direct shipyard job, an estimated five to seven additional jobs are created in upstream parts and component suppliers. These positions often offer wages at the higher end of the manufacturing spectrum, with some skilled workers earning upwards of $200,000 per year. Without a robust domestic capacity, the U.S. risks remaining overly reliant on foreign-built vessels for critical economic and strategic needs.
Recognizing these challenges, there have been increasing calls to revitalize America’s shipbuilding industry. The Biden administration took steps in this direction, proposing a $2.25 trillion infrastructure package in 2021 that included some funding for shipyards. The bipartisan Shipyard Act, though ultimately unsuccessful, aimed to improve shipyard facilities. More recently, the Biden administration focused on fostering public-private partnerships to support the Navy’s shipbuilding program and create opportunities for commercial shipbuilders.
The Trump administration appears poised to double down on efforts to rebuild America’s maritime industrial base. During his campaign, Donald Trump highlighted the disparity between U.S. and Chinese shipbuilding capacities, framing it as both an economic and national security issue. Early indications suggest his administration will pursue a multifaceted approach to revitalizing the industry.
One potential strategy involves imposing targeted sanctions or fees on foreign-built ships entering U.S. ports. The revenue generated from such measures could be directed into a “shipyard commercial revitalization fund,” providing much-needed capital for modernizing existing facilities and potentially constructing new shipyards. This approach would essentially create a self-funded mechanism for industry reinvestment.
Another proposal gaining traction is the Ships for America Act, a bipartisan piece of legislation co-sponsored by Rep. Mike Waltz, who is slated to become Trump’s national security adviser. This act seeks to incentivize shipyard development, including increasing the availability of dry dock and repair facilities. By offering tax breaks, streamlined permitting processes and other incentives, the act aims to make shipbuilding in America more economically viable.
The Trump administration is also exploring international partnerships to bolster U.S. shipbuilding capabilities. “We used to build a ship a day,” Trump said last month in an interview. “We don’t build ships anymore. We want to get that started. And maybe we’ll use allies, also, in terms of building ships. We might have to.”
Discussions with South Korean President Yoon Suk Yeol have hinted at potential bilateral efforts between South Korean and U.S. shipbuilders to improve processes and efficiencies. This collaboration could build upon recent investments by South Korean firms in the U.S. industry, such as the acquisition of the East Coast’s Philly Shipyard in late 2024.
America’s 250th birthday is coming up, and the strategic revitalization of its shipbuilding industry stands as both a challenge and an opportunity. Success in this absolutely critical sector would not only strengthen America’s maritime capabilities but also reinvigorate communities that once thrived on shipbuilding, creating thousands of high-paying jobs and bolstering the nation’s industrial base. While restoring American shipbuilding will take decades, the next few years could prove to be the inflection point, if the policies, investments and public sentiment align to produce real results.
Quotable
“The shipbuilding industrial base is a subset of the defense industrial base, and the defense industrial base is a subset of the American industrial base. Creating policies for the Department of Defense to help shipbuilders is good; whole-of-government efforts to invigorate manufacturing are better.”
– Erik Raven, former undersecretary for the Navy, Jan. 28
Infographic
Note: This figure plots the world market share in terms of the number of ships delivered from 1892-2014 for the major ship-producing countries. Data for 1892-1997 was obtained from historical issues of World Fleet Statistics published by Lloyd’s Register, while the data from 1998 onward is based on Clarksons data. (Chart: Centre for Economic Policy Research)
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