Last month, China showcased its largest display of military power around Taiwan in nearly three decades, deploying over 90 naval and paramilitary vessels along with numerous aircraft in the region. This display raised concerns about potential escalation, such as a blockade of Taiwan or heightened conflict. Compared to the U.S., China’s shipbuilding capacity is significantly larger, allowing them to produce a vast number of ships annually for both commercial and naval purposes.
Chinese dominance in commercial shipping and shipbuilding has granted them a considerable military advantage. By controlling key aspects of the maritime industry and having a superior production capability, China could quickly bolster its naval fleet at a lower cost compared to the U.S. and its allies. If a conflict were to arise, China could exploit its maritime strength to disrupt the American economy and rapidly expand its military presence.
In contrast, the U.S. faces logistical challenges in resupplying troops overseas for extended conflicts due to its limited maritime capacity. The Pentagon relies on an industrial base geared towards producing high-end warships, making it difficult to ramp up production of smaller vessels quickly. The lack of a robust American commercial maritime sector further complicates the situation.
To address these issues, a bipartisan bill called the Ships for America Act has been proposed to revitalize the American maritime industry. This legislation aims to triple the number of American cargo ships engaged in international trade, support domestic shipbuilding, and enhance supply chain resilience. By boosting the maritime workforce, streamlining regulations, and ensuring stable funding, the bill seeks to strengthen the foundations of the industry.
China’s competitive edge in the maritime sector stems from factors such as lower labor costs and substantial government support. While Western nations neglected their shipping and shipbuilding industries, China invested heavily in theirs, leading to significant advantages in the global maritime market.
One of the largest peacetime expansions of global shipping capacity in modern history has greatly benefited Chinese maritime businesses by providing significant economies of scale and scope. As the United States seeks to address its maritime risks and revitalize its shipping and shipbuilding industries, the key question is not whether to provide government support, but rather how to structure that support in a manner that is both effective and cost-efficient. The Ships for America Act presents a demand-driven approach that aims to meet this test.
Instead of allocating substantial funds in an attempt to outstrip China’s maritime capabilities, the proposed legislation focuses on swiftly expanding the U.S. fleet by reflagging existing ships built by allies. Additionally, the bill seeks to expedite the construction of technologically advanced American-made ships within the program. These vessels would be strategically deployed in international commercial markets to maximize their contributions to national and economic security, while also being contracted to support military sealift operations and other U.S. security interests.
Under the Ships for America Act, taxpayer support would be carefully managed through competitive procurement processes, covering only the additional expenses associated with “Americanizing” ships – such as constructing them in the U.S. and staffing them with American mariners. Over time, costs are anticipated to decrease as shipbuilders gain expertise and as shipping customers are encouraged to utilize American vessels.
The expansion of the U.S. flag fleet through this initiative would not only bring on board numerous skilled American mariners but also generate substantial work opportunities for a wide array of U.S. businesses. From naval architecture and design firms to steel and equipment manufacturers, the ripple effects of building these ships in American shipyards would permeate throughout the supply chain, bolstering the domestic economy.
The Ships for America Act is positioned as a strategic blueprint for a forward-thinking, 21st-century reindustrialization policy aimed at tackling the current geopolitical challenges. Advocates argue that passing this legislation should be a top priority for the incoming Congress. Bryan Clark and Michael Roberts, senior fellows at the Hudson Institute and co-authors of the recent report “Shoring Up the Foundation: Affordable Approaches to Improve U.S. and Allied Shipbuilding and Ship Repair,” champion the Act as a crucial step in safeguarding national interests and enhancing economic competitiveness.
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