U.S. Files Trade Challenge Against China's Shipbuilding Dominance
U.S. Files Trade Challenge Against China's Shipbuilding Dominance
The United Steelworkers (USW) union, which represents iron and steel workers in the United States, has filed a Section 301 petition with the U.S. Trade Representative (USTR) to examine China's anti-competitive commercial shipbuilding practices. Over the past two decades, the People's Republic of China (PRC) has implemented various non-market policies aimed at establishing dominance in global shipbuilding and excluding competition, with the goal of controlling global shipping and logistics networks. During this period, shipbuilding capacity in the United States has declined steadily.
USW International President David McCall noted that the United States, which once hosted nearly 30 major shipyards, now has only a fraction of that capacity. Combined with the loss of more than 70,000 shipbuilding jobs, McCall highlighted the loss of secondary jobs supported by the industry. McCall pointed out that a commercial vessel may require 13,000 tons of structural steel, 60,000 gallons of paint, and numerous other products that tens of thousands of USW members take pride in producing.
The People's Republic of China's strategy of providing hundreds of billions of dollars in subsidies to state-owned enterprises to establish dominance in global commercial shipbuilding has posed a national security threat and galvanized a growing group of policymakers committed to supporting U.S. efforts to revitalize the shipbuilding industry.
Section 301 gives the President authority to retaliate against any actions by a foreign government that unfairly burden or restrict U.S. trade. Along with the USW, several other unions have joined the trade petition, and U.S. Senators Tammy Baldwin and Bob Casey have sent letters to the Biden administration in support of the petition.
President Biden recently announced a $20 billion investment aimed at increasing production of critical port infrastructure in America. This investment is designed to counter China's market-leading production in ports worldwide, including in the United States. U.S. Trade Representative Katherine Tai has a 45-day period to decide whether to launch an investigation into China's shipbuilding practices.
Key Takeaways
The USW and other unions filed a Section 301 petition with the USTR against China's anti-competitive shipbuilding practices.
China is implementing policies aimed at establishing dominance in global shipbuilding and excluding competition.
Shipbuilding capacity and jobs in the U.S. have declined significantly.
The PRC's strategy poses a national security threat and supports U.S. efforts to revitalize the shipbuilding industry.
The Biden administration announced a $20 billion investment to strengthen port infrastructure.
The USTR will decide whether to launch an investigation into China's shipbuilding practices.