The U.S. nears its 250th anniversary, the country’s shipbuilding industry, once thriving with over 300 shipyards in the 1980s, faces a turning point. Today, only about 20 private and public shipyards remain. These shipyards are critical for national security, economic stability, and the U.S. Navy’s modernization. The ongoing revitalization of the shipbuilding sector aligns with the strategic goals of both the Biden and Trump administrations.
The Need for a Stronger U.S. Shipbuilding Industry
The U.S. faces serious challenges in global shipbuilding. In 2023, China dominated the market with 59% of new orders, while the U.S. controlled a mere 0.13%. This dominance raises concerns about China’s influence on shipbuilding prices and its control over the production of warships, which are crucial for U.S. allies.
To counter this, both administrations have emphasized the importance of rebuilding America’s maritime base. A strong domestic shipbuilding sector is necessary not only for maintaining a robust Navy but also for supporting global trade, supply chains, renewable energy projects like offshore wind farms, and national defense capabilities.
Trump Administration’s Focus on National Security and Industry Rebuilding
During his 2016 campaign, then-presidential candidate Trump highlighted the growing global dominance of China in shipbuilding. His administration’s focus on national security and the industrial base led to initiatives like Battle Force 2045, a plan to increase the Navy’s fleet capacity. Despite budget cuts in 2020, efforts to invest in shipyards continued, recognizing the sector’s role in U.S. military and economic strength.
Biden Administration’s Approach: Partnerships and Green Jobs
The Biden administration’s focus on private sector partnerships and infrastructure investment aimed to rebuild America’s shipyards. In 2021, Biden proposed a $2.25 trillion infrastructure package, which included support for shipyard modernization. However, progress was limited, with the Shipyard Act stalling in committee. Despite this, the Biden administration successfully pursued collaborations with major private companies. By 2024, one of the world’s largest commercial shipbuilders committed to supporting the U.S. Navy’s shipbuilding program, and a major private shipyard took on the task of building polar icebreakers for the U.S. Coast Guard.
Looking Ahead: Trump’s Second Term and the Future of U.S. Shipbuilding
As President-Elect Trump prepares to take office in January 2025, he has signaled a continued focus on enhancing private sector collaboration. In a call with South Korean President Yoon Suk Yeol, Trump expressed interest in improving U.S.-South Korean shipbuilding relations to enhance efficiencies and processes. This partnership is likely to foster the growth of South Korean shipbuilders in the U.S., exemplified by the Philly Shipyard acquisition in December 2024.
Additionally, the Ships for America Act, introduced in December 2024, seeks to incentivize shipyard development, particularly increasing dry dock and repair facilities. This bipartisan legislation, co-sponsored by Rep. Mike Waltz (R-Fla.), aims to address China’s growing influence in the sector. With strong support from key figures like Marco Rubio and Jamieson Greer, the bill is expected to provide significant funding and policy support for shipyard modernization.
The Road Ahead
With significant investments and policy incentives, U.S. shipyards are poised for modernization and growth. The emphasis on public-private partnerships, bipartisan support, and national security will likely lead to a resurgence of the U.S. shipbuilding industry, contributing to economic stability, military readiness, and global trade competitiveness.
Shipyard-related legal, regulatory, disputes, and real estate expertise will be essential as these initiatives move forward, paving the way for a strategic and robust maritime future for the United States.
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Source: Holland & Knight
