China Challenges Trump's US Shipbuilding Dream
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China's top two shipbuilders are finalizing a merger that began in 2019, creating the world's biggest shipbuilding company.
The $16 billion deal is expected to further widen China's lead over the United States, as President Donald Trump pushes to revive the nation's stagnant shipbuilding industry.
Newsweek reached out to the White House via email for comment.
Why It Matters
China has vaulted to the forefront of global shipbuilding over the past two decades. The country's largest state-owned shipbuilder, China State Shipbuilding (CSSC), delivered more commercial vessels by tonnage in 2024 than the entire U.S. shipbuilding industry has produced since the end of World War II, according to Washington, D.C., think tank the Center for Strategic and International Studies.
China's shipbuilding capacity also increasingly extends to sea power. The People's Liberation Army Navy now boasts the world's largest fleet by hull count and is producing nearly three ships for every one launched by the U.S. Navy, according to Admiral Samuel Paparo, head of the Indo-Pacific Command.
What To Know
This week, the CSSC is absorbing the country's second-largest shipbuilder, China Shipbuilding Industry Corporation, with trading in both companies' shares suspended on Tuesday.
Together, the two companies accounted for nearly 17 percent of the global market in 2024, according to data on new orders from maritime analysis firm Clarksons Research.
Originally part of the same organization, the two firms were split in 1999 under Chinese Communist Party reforms aimed at introducing limited competition among state-owned enterprises.
Beijing hopes the merger will reduce costs and cushion the blow of U.S. trade actions.
The world's largest containership, built by Hudong-Zhonghua Shipbuilding Group, in Rotterdam harbor, Netherlands, on August 12, 2022.
The world's largest containership, built by Hudong-Zhonghua Shipbuilding Group, in Rotterdam harbor, Netherlands, on August 12, 2022.State media have hailed the deal as a step to eliminate inefficiencies, optimize resource allocation, and strengthen China's prospects in the global shipbuilding market amid geopolitical tensions and competition from competitors such as South Korea and Japan.
"In recent years, the U.S. has launched crackdowns against China's shipbuilding industry, such as the so-called Section 301 action targeting China's maritime, logistics, and shipbuilding sectors, and the port fee plan," said the Global Times.
This Trump administration has begun phasing in new port fees on Chinese vessels, claiming unfair trade practices and state subsidies.
These measures appear to be having an effect. According to global trade association the Baltic and International Maritime Council, China's share of new shipbuilding orders declined to 52 percent from 72 percent in the first half of this year.
What People Are Saying
Tom Shugart, an adjunct senior fellow at the Center for a New American Security, told Newsweek: "China's already massive shipbuilding capacity remains under a single, state-controlled enterprise.
"That scale, coupled with the integration of military and commercial production, will remain a central enabler of China's naval expansion—and a key factor in the eroding U.S.–China maritime balance."
Xu Yi, an analyst at Shanghai-based risk management firm Haitong Futures, told the South China Morning Post: "This merger marks the largest strategic restructuring in China's shipbuilding history, aimed at optimising resource allocation and enhancing competitiveness in the global market."
President Donald Trump said in his March 6 address to Congress: "We used to make so many ships. We don't make them anymore very much, but we're going to make them very fast, very soon. It will have a huge impact."
What Happens Next
Trump has pledged to "resurrect" both commercial and military shipbuilding in the United States, lamenting that only 0.2 percent of the world's ships are built domestically compared with nearly three-quarters in China.
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