President Donald Trump has been dogged in his focus on reviving the nation’s maritime industry – shipbuilding and shipping. On this point, driven by China’s threats, there has been a consensus for the past several years that a stronger Navy is urgently required. However, building that fleet and sustaining it requires a revival of America’s moribund maritime industrial base.
Progress has been notable but tentative, and the President’s meeting with China’s Xi Jinping comes at a critical moment in this endeavor.
The summit with Xi Jinping offers an opportunity to bolster our nation’s maritime revival. Key to this mission is holding Beijing accountable for its predatory maritime practices, as you affirmed in section 301 complaints last year. Fees on foreign-flagged ships calling in American ports should be reinstated and associated penalties pursuant to section 301. This will finance the Maritime Security Trust Fund, to be established by executive order, and is critical to creating a favorable environment for the American maritime industry.
Beyond the summit, our national focus must be on regaining an American maritime comparative advantage in the global maritime marketplace and clawing back market share. As this author has often argued, this is possible and urgently needed. That in mind, our nation has a unique opportunity as global demand for new commercial shipping is on track to outstrip production in the coming years – something our Japanese and South Korean allies recognize. Their investments are partly fueled by the promise of Maritime Prosperity Zones, also directed by executive order and also embraced by Congress.
The President’s executive orders and maritime action plan point the way and must be implemented aggressively to begin what will be a decade-long endeavor. Temporary Jones Act regulatory waivers might modestly mitigate the impacts of the current conflict with Iran, but they will not carry the nation far enough. America needs assured shipping, as recognized in the 1989 National Security Directive (NSD-28).
Research conducted by the Heritage Foundation indicates the nation needs over 1,300 commercial ships in various classes to mitigate Chinese economic coercion and meet our military needs. The scale of the shipping deficit and the urgency to address this vulnerability make clear that allied participation will be key. Locking in the momentum so far achieved requires memorializing executive orders in law – today this is best reflected in the proposed SHIPS for America Act, which Heritage Foundation has played a foundational role in.
Additionally, the move to retool Development Finance Corporation’s political risk insurance and guaranty for shipping Protection & Indemnity (P&I) insurance in the Persian Gulf is welcome and critical. The implications, however, go far beyond the Persian Gulf, and this effort should be expanded with an eye to the Pacific.
The President’s leadership has been pivotal in launching a long-overdue revival of American maritime power and has instilled confidence and a sense of common cause with our closest allies. But without a structure to build on this growing allied consensus, investments in the U.S. and efforts to reshape global maritime regulations, such as unhelpful carbon-zero regulations under consideration by the International Maritime Organization.
As such, it is time to establish a Maritime Group of Nations modeled on the G7, with key like-minded nations, to meet our nation’s urgent needs for assured shipping and to reshape the global maritime marketplace.
All eyes will be on the summit in Beijing, which comes at a critical moment in the nation’s nascent maritime revival. Pushing back on Beijing’s predatory practices in accordance with the Section 301 complaint is needed, and sustaining investment in our domestic shipbuilding with key allies is necessary.
A strong rebuttal of Beijing’s maritime practices and a demonstration of American commitment to its strategically important maritime industry will rally allies and investors and set the stage for a prolonged maritime revival.
About the Author: Brent D. Sadler
Brent D. Sadler is a senior research fellow specializing in naval warfare and advanced technology at The Heritage Foundation’s Allison Center for National Defense.
