Trump’s Shipbuilding Plan Reshapes Ocean Cargo Landscape

Key Takeaways

• President Trump’s “Make Shipbuilding Great Again” plan introduces major changes to global shipping
• Port fees on Chinese-built vessels could increase freight rates by up to 40%
• Major carriers like MSC and Maersk are already adjusting their strategies
• Domestic U.S. shipbuilding costs are expected to rise significantly
• The plan creates tensions with China while attempting to revive American maritime industries

The Race to Revitalize American Shipbuilding

President Donald Trump’s bold maritime initiative to revive American shipbuilding has sent ripples across the ocean cargo industry. The plan, known as “Make Shipbuilding Great Again,” aims to reverse decades of decline in U.S. shipbuilding through tariffs on imported vessels and redirection of harbor maintenance taxes into a Shipbuilding Revitalization Fund.

The U.S. once dominated global shipbuilding, controlling over 50% of worldwide commercial vessel construction until the 1950s. This position eroded as Asian shipyards in South Korea, Japan, and China gained market share through lower labor costs and government support. By the 2000s, America’s market share had fallen below 1%.

Trump’s executive order tackles this problem through three main approaches:

1. A 15% surcharge on all imported vessels
2. Requirements for 60% domestic content in federally subsidized vessels
3. Technology transfers from Navy programs to commercial shipbuilders

Rising Costs Across the Supply Chain

The plan’s economic effects on ocean cargo operations are already becoming apparent. Container ship contracts at U.S. yards now average $145 million versus $90 million at Chinese counterparts. This cost gap creates pressure throughout the supply chain.

Labor costs in Gulf Coast shipyards have jumped 22% year-over-year as yards compete for skilled workers. Steel plate prices have increased 18% following tariffs on Chinese imports. These factors combine to push up vessel construction and operation costs.

The World Shipping Council warns that cascading costs could drive Asia-U.S. West Coast rates above $3,500 per FEU by late 2025—a 40% increase from previous levels. This price jump would affect everything from consumer goods to manufacturing inputs.

Port Problems and Logistics Logjams

Beyond cost increases, operational challenges in ports and logistics are emerging. Naval shipbuilding projects now consume 18% of dry dock capacity previously used for commercial vessel repairs. This forces carriers to divert ships to Mexican and Canadian yards, creating delays and disruptions.

The Port of Houston reports average repair delays exceeding 23 days, which throws off sailing schedules. “Buy American” mandates for port equipment have reduced crane efficiency at 14 major harbors to below 60% of optimal levels.

Intermodal bottlenecks are worsening as trucking firms prioritize military equipment haulage. This creates chassis shortages that slow container movement through ports, adding yet another layer of complexity to an already strained system.

How Global Carriers Are Responding

Ocean carriers aren’t waiting to see how the policy unfolds—they’re already making strategic moves. Maersk has accelerated scrapping of Panamax vessels, pivoting toward smaller, more flexible fleets that minimize exposure to U.S. tariff regimes.

Meanwhile, MSC has withdrawn services from Oakland while investing $2 billion in automation at other U.S. ports—a long-term bet on overcoming labor constraints through technology.

Alliance structures are changing too. The Ocean Alliance has dissolved in favor of vessel-sharing agreements between COSCO Shipping and French container carrier CMA CGM. These new arrangements help carriers restructure networks to reduce exposure to U.S.-focused trade lanes.

China’s Counter-Moves and Global Tensions

Beijing isn’t standing still in response to Trump’s plan. The “Blue Silk Road” initiative allocates $7 billion to subsidize Chinese-built vessels serving U.S. routes, artificially maintaining freight rate competitiveness despite American tariffs.

China has also restricted rare earth exports to U.S. shipyards, delaying LNG tanker deliveries by 14 months. These moves show how the shipbuilding plan fits into broader trade tensions between the world’s two largest economies.

European nations have adopted a cautious stance. EU antitrust regulators now scrutinize carrier alliances serving North America, fearing potential collusion to offset tariff impacts. The French government’s support for CMA CGM includes requirements to reduce U.S. route exposure to 30% by 2027.

Workforce and Technology Challenges

A skills gap crisis looms over the ambitious shipbuilding goals. The Maritime Administration reports a 58,000-worker shortfall in shipbuilding trades, made worse by the policy’s apprenticeship requirements.

Some carriers are taking matters into their own hands. Hapag-Lloyd now funds vocational schools in Alabama and Mississippi to secure access to skilled workers. Huntington Ingalls is developing robotic welding systems for commercial hulls, though union resistance has limited deployment to 12% of civilian yards.

The Environmental Dimension

The push for LNG-powered vessels creates a “chicken-and-egg” problem for emission reduction efforts. While the policy promotes cleaner ships, only 18 U.S. ports currently offer LNG bunkering facilities.

This shortage forces carriers to maintain dual-fuel systems, adding $8 million per vessel in upfront costs. Customers face fuel surcharges of $125 per TEU for LNG-capable ships, further pushing up transportation costs.

Finding Balance in Turbulent Waters

Trump’s shipbuilding plan creates both opportunities and challenges for the ocean cargo industry. While it aims to rebuild American maritime strength, the protectionist measures create ripple effects throughout global supply chains.

Success will depend on finding the right balance: gradually implementing tariffs as domestic capacity expands, allowing temporary collaboration among carriers to absorb cost shocks, and targeting subsidies to technologies that serve both naval and commercial needs.

For shippers and consumers, the next few years will bring higher costs and potential disruptions. For the U.S. maritime sector, the plan offers a chance to rebuild lost capacity—but at a significant price. The global shipping industry must now navigate these choppy waters with care.