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U.S. Shipyards Face Slow Revival; Duties Stress China's Manufacturers By Mark R. Long

The Trump administration's goal to revive moribund U.S. shipbuilding and force more goods onto American-flagged ships faces a raft of labor and financial challenges.

WSJ's Inti Pacheco and Costas Paris report how U.S. shipyards struggle to finish more than one containership or oil tanker a year and accounted for just 0.1% of global tonnage in 2023 , while Asian yards launch hundreds annually.

This is a big step down from the 1970s, when the U.S. accounted for about 5% of tonnage. The U.S. ceded this market to other countries over several decades, with the number of welders, engineers and other people needed to build ships slumping, though military contracts have drawn some of these workers back.

China has filled this vacuum, and pulled business away from other major shipbuilding countries such as South Korea and Japan. More than half of world tonnage produced in 2023 came from China, and the nation accounted for nearly three-quarters of orders for new ships last year.

This leaves big ocean carriers from several nations exposed to possible new charges the Trump administration has proposed on Chinese-built vessels. Mediterranean Shipping, known as MSC, A.P. Moeller Maersk and CMA CGM all rely on hundreds of Chinese-made ships to move goods around the world.

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Economy & Trade

The threat of an additional 10% tariff on Chinese goods is adding urgency to manufacturers' plans to shift production outside the country, especially to Southeast Asia.

The Journal's Clarence Leong and Hannah Miao write that Chinese manufacturers believed they could weather the 10% in additional duties imposed early last month by the Trump administration. But this latest, additional 10% levy-set to take effect on Tuesday-leaves these companies looking forward to a doubling of the pain and is an omen that razor-thin profit margins could get squeezed even further.

Making and shipping goods from other countries, such as Vietnam, allows U.S. importers to avoid paying the new duties, unless the Trump administration targets those countries, as well.

Smaller Chinese manufacturers with limited resources are in an especially tight bind, as they can't afford to build new facilities in different countries.

One lawyer advises his Chinese manufacturer clients: Diversify customer bases to ease reliance on American consumers, and shift production elsewhere.

Trump's tariff onslaught is coming faster than his team can carry it out . (WSJ) Quotable Number of the Day In Other News

The countries fueling America's $1.2 trillion trade goods deficit , in charts. (WSJ)

Canada's foreign minister says new economic, security partners are needed amid shift in U.S. (WSJ)

India's economy picked up in the most recent quarter . (WSJ)

Germany's jobless rate held steady in February . (WSJ)

Consumer inflation in the Tokyo metropolitan area eased in February . (WSJ)

Super Micro Computer is building a third campus set to be 3 million square feet in California's Silicon Valley. (WSJ)

BASF expects earnings to increase slightly this year. (WSJ)

HP plans to lay off up to 2,000 more employees as part of a continuing cost-cutting plan. (WSJ)

CMA CGM posted revenue of $55.5 billion for 2024, up nearly 20% from the previous year. (Lloyd's List)

A.P. Moeller-Maersk plans to invest $5 billion in India's ports , terminals, and landside infrastructure. (The Economic Times)

The collapse of auto hauler Jack Cooper Transport will likely be a tailwind for other carriers in the sector. (Transport Topics)

Retailer Forever 21 is laying off more than 350 corporate employees and closing its Los Angeles headquarters. (Los Angeles Times)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 03, 2025 07:06 ET (12:06 GMT)

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