American shipyards are building three of the 5,448 large commercial vessels on order worldwide

July 23, 2025
Ed Gresser

FACT: American shipyards are building three of the 5,448 large commercial vessels on order worldwide.

THE NUMBERS: Major commercial vessels on order, 2024* –

WORLD	5,448
China	3,419
Korea	710
Japan	668
European Union	197
United States	3
All others	451

* BRS Shipbrokers 2025 Annual Review

WHAT THEY MEAN:

Ecclesiastes 1:9: “The thing that hath been, it is that which shall be; and this which is done is that which shall be done: and there is no new thing under the sun.”

The Biden administration’s signature economic plan — “industrial strategy” to rejuvenate aging industries or create new ones — tried to use loans, tax credits, and regulations to ramp up semiconductor chip production and build electric vehicles, battery factories, and low-emission power plants. Its authors achieved less than they hoped. A big reason was their addition of extra costs and qualification hurdles related to different priorities — especially the expensive “Buy American” mandates, but also hiring guidelines, child-care rules, etc. — to the core “more chip-making” and “low-carbon future” goals. This meant industrial-strategy projects cost more, arrived later, had less real-world impact, and wound up more associated in the public mind with spending and higher prices than industry and jobs.

“The thing that hath been done, it is that which shall be.” This spring, the Trump administration adopted the last Biden-era program — an effort to use fees on arriving Chinese-built or Chinese-owned/operated ships to subsidize creation of a U.S. commercial shipbuilding industry. They’re also repeating the Biden team’s extra-cost mistake: Mr. Trump’s obsession with tariffs, especially on metals, suggests that though the shipbuilding program will raise costs for Americans, it won’t launch many ships. Background:

The hope of the chip and EV programs was to enlarge, and partially reshape, large existing industries with lots of capacity, skilled workers, and engineering talent. Reviving commercial shipbuilding is a bigger job. It’s been 70 years since American shipyards built many cargo vessels — the U.S. share of world commercial shipbuilding was only around 2% in the 1960s and 1970s, and has been under 1% since the late 1980s. The current data:

1. Vessel orders: BRS Shipbrokers’ annual review reports 5,448 large cargo vessels on order worldwide in 2024. These are the container ships, tankers, ro/ros, grain carriers, etc. that will carry the world’s cargoes in the 2030s. Chinese yards are making 3,419 of them, while Japan and Korea combine for 1,378. EU countries are building 197; Vietnam, India, Turkey, and the Philippines do most of the rest. The U.S.’ count was an inglorious “three”.

2. Vessel costs: U.S.-built cargo vessels are also expensive. The three 3,620-TEU (i.e., 3,620 twenty-foot containers) Aloha-class container ships under construction at the Philly Yard, destined for domestic Jones Act transport rather than “blue water” intercontinental cargoes, cost about $330 million each. By comparison, the 32 giant container ships Maersk reportedly contracted last year to buy from Korea’s Hanwha Ocean — 22,000 TEU to 24,000 TEU apiece, six times Aloha-class capacity — cost about $272 million each. (Comical asterisk: Hanwha bought the Philly Yard last December, and presumably inherits the Aloha-class contract.)

Given how few commercial ships Americans now build and how much they cost, this industrial-strategy project looks, well, challenging. That doesn’t mean it’s impossible, though, and in an era of alarming naval competition, the idea has strategic appeal. But it at minimum needs enough money to:

(a) Purchase land and offer construction contracts to build shipyards able to assemble much larger ships.
(b) Recruit tens of thousands of specialized engineers, welders, and other workers.
(c) Drastically cut the price of U.S.-made ships, so yards could sell them to big international maritime companies as well as small captive-market Jones Act carriers.
(d) Perhaps underwrite some sort of technological leap, rethinking ship-construction methods altogether through advanced AI design, which might, maybe, possibly, help turn the U.S.’ lack of a big incumbent shipbuilder into a “first-mover” advantage.

Now to the fees. They result from a “Section 301” unfair trade petition filed in 2024 by a labor union group, arguing that Chinese subsidies since 2000 had damaged U.S. shipbuilding. The premise is intellectually shaky — U.S. yards were building just two commercial vessels in 2000 – but the Biden administration approved it, and the Trump administration uses it as the legal basis for fees that, barring some change in plan, by April 2028 will reach:

$140 per net ton [note: a measurement of cargo capacity] for Chinese-owned or -operated ships.
$33 per net ton or $250 per off-loaded container, whichever is higher, for Chinese-built container ships with capacity above 4,000 TEU.
$14 per net ton for automobile carriers [note: perhaps legally vulnerable, as it covers all ro/ros made outside the U.S., not only those made or operated by Chinese firms].

Outside the shipbuilding world, the fees will mean new costs. At face value, the fee for unloading 10,000 containers from a Chinese-built container ship operated by a non-Chinese company looks like $2.5 million, and for similar vessels owned by Chinese or Hong Kong carriers, about $10.5 million. As shipping firms incorporate these costs into their cargo charges, prices would rise for both incoming consumer goods and factory or farm inputs (half of all container traffic). American seaports would lose some business, harming local and hinterland economies and reducing U.S. trucking and rail employment. And with fewer vessel calls, especially at smaller ports, exporters, too — especially western-state farmers — would have fewer choices among carriers and higher cargo charges, probably losing some overseas sales. (Exports are 20% of U.S. farm income.) Overall, one analyst this spring estimated, assuming average cost of $1 million per port call, that the fees might reduce U.S. GDP by 0.24% (about $72 billion), with the largest drops in farm income.

They probably won’t, though, bring in enough money for an industrial-strategy project this big. Where the Congressional appropriations and tax breaks for chip and EV production were large and predictable, vessel-call fee revenue would be uncertain and volatile. Importers and shipping firms (at least big ones which own lots of ships) can, after, shift vessel arrival patterns to reduce cost: use non-Chinese ships for American ports when possible; employ small ships exempt from fees more often; drop off Chinese-carried cargos in Mexico or Canada for land transport; centralize calls at very big American ports; bypass smaller ports.

Meanwhile, the Trump administration has adopted the Biden team’s characteristic error as well as its industrial-strategy concept. Fees or not, a different policy — higher tariffs, especially on metals — will likely scuttle their core ship-building goal.

Large ocean vessels, after all, are made of metal. Even relatively small Aloha-class container ships use about 14,000 tons of steel. Really big ones like Maersk’s 24,000-TEU EEE-class fleet — 399 meters from stern to bow, as long as an ultra-tall skyscraper is high — are colorfully said to use “eight Eiffel Towers” worth of steel, which would be around 55,000 tons. As a micro-illustration, each link in their anchor chains weighs almost 500 pounds. And even before Mr. Trump’s abrupt June steel-tariff hike (from an already very heavy 25% to 50%), U.S. prices were high. According to the Commerce Department, this spring’s average steel prices were:

U.S.	$984/ton
Europe	$660/ton
World	$440/ton
China	$392/ton

In short, American shipbuilders pay twice as much as their Japanese or Korean competitors for steel. That’s an extra $30 million for even one big ship. The new 50% rate will add millions more. So will similar aluminum and copper tariffs. So will the administration’s 10% “baseline” and higher “reciprocal” tariffs on paint, wiring, telecom equipment, and other inputs, should they survive court scrutiny this summer. No foreign shipbuilder pays anything like this.

So: Creating a big U.S. commercial shipbuilding industry from near-scratch looks hard and
expensive under any circumstances. That doesn’t necessarily make it hopeless. But trying to create one, while also using tariffs to make U.S.-built ships even more expensive and harder to sell, is probably impossible. Ecclesiastes gets the mordant last word on the usually futile, and often endless, way public money flows into such “subsidies plus mandated cost increases” programs: “All the rivers run to the sea; yet the sea is not full.”

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.