The U.S. has unveiled a concrete blueprint to rebuild its shipbuilding industry by leveraging allied shipyards, including those in South Korea and Japan. The funding required for this shipbuilding revival will be generated by imposing entry fees on all foreign-made merchant ships entering the U.S. While the domestic shipbuilding industry sees this as an opportunity to access a massive market, it also comes with the challenge of rapidly advancing local investments and technology transfers.
The U.S. government formalized this ‘bridge strategy’ in its ‘America’s Maritime Action Plan,’ published on the White House’s official website on the 13th, local time. The strategy involves initially ordering multiple vessels from allied shipyards while simultaneously investing in and modernizing U.S. shipyards, with the goal of transitioning remaining orders to domestic production. This approach reflects the dire reality of the U.S. shipbuilding industry, which holds less than 1% of the global market share.
The domestic shipbuilding sector expresses cautious optimism. The plan could circumvent the ‘Jones Act’ and the ‘Burns-Tollefson Amendment,’ which previously blocked access to the U.S. shipbuilding market by prohibiting the construction of merchant ships and U.S. Navy vessels in foreign shipyards. A source from the domestic shipbuilding industry stated, “This could be an opportunity to secure profitability by utilizing our infrastructure and technological capabilities while entering the North American market.” U.S. naval vessel construction costs are known to be 3 to 4 times higher than those in South Korea. However, critics warn that the strategy could act as a ‘double-edged sword,’ as it requires swiftly transferring South Korea’s technological competitiveness to the U.S., including modernizing shipyards and training personnel.
The plan also includes establishing a ‘Maritime Security Trust Fund’ to finance the U.S. shipbuilding revival. It proposes imposing a ‘universal fee’ of 1 to 25 cents per kilogram of cargo on all foreign-built commercial ships entering U.S. ports, aiming to raise up to 1.5 trillion dollars (approximately 2.17 quadrillion Korean won). A source from the shipping industry remarked, “Given that 99% of the world’s merchant ships are built outside the U.S., this is effectively a maritime tariff,” adding, “It will inevitably increase logistics costs for U.S. exporters.”
Source: The Chosun Daily
