How to Kill Your Own National Commerce: Trump Policy in Action

One of Trump’s dreams/delusions announced during his presidential campaign and again recently is the resurrection of the US ship building industry that for a wide variety of reasons almost no longer exists, which isn’t the only industrial realm he hopes his tariff and other policies will somehow revive, although the likely result is their further sinking. The immediate issue now is the idea of levying another tax—port fees—on Chinese flagged or ships constructed in China that would somehow aid in the resurrection of US ship building. The following portion from today’s Global Times op/ed points to the idea’s huge fallacy:

The strongest opposition came from US businesses. Jonathan Gold, vice president of supply chains and customs policy at the National Retail Federation, stated that industry representatives see "this as more of a threat than the tariffs," as it will directly disrupt the stability of supply chains. Kathy Metcalf, CEO of the Chamber of Shipping of America, bluntly pointed out that replacing existing China-built vessels is not like flipping a light switch. Seaboard, the largest international cargo carrier in the US, operates a fleet of 24 vessels - 16 of which were built in China. Its CEO testified that imposing port charge on Chinese-made ships "unintentionally destroys American-owned carriers." Many business owners and industry representatives further argued that using port fees to revive the US shipbuilding industry is meaningless, as it would push American shippers and small and mid-sized ports into survival crises, drive up prices, slash exports, reduce jobs, shrink GDP, and even deal a devastating blow to US economy. These firsthand testimonies tore apart the illusion of "industrial revitalization" fabricated by some US politicians and exposed the fundamental paradox of protectionism - policies enacted in the name of safeguarding interests often end up hurting the livelihoods of Americans.

Further damage will be caused to the entire international shipping business that will further inflate costs and increase chaos:

The implementation of port fees will also cause chaos in the global shipping industry, further devastating the already fragile global supply chain. Joe Kramek, President and CEO of the World Shipping Council, calculated that port fees could add $600 to $800 in costs per container. Experts and business representatives from the shipping industry have issued stern warnings: on the one hand, as shipowners from various countries reduce calls at US ports, ports in Canada, Mexico, and other nations may face increasing pressure, and shipping schedules worldwide will be disrupted; on the other hand, the pressure of rising global shipping costs will inevitably ripple through to other countries.

Soren Toft, CEO of Geneva-based MSC Mediterranean Shipping Co, the world's largest container shipping company, stated that the total industry impact by the port fees is likely to be more than $20 billion. Representatives from Caribbean countries believe that this measure will also hurt the region's oil and gas industries. Currently, the port fees are still under review, but many shipowners have already refused to offer quotes to US exporters. These voices indicate that the US' unilateral actions are no longer merely "domestic matters" but are harming the multilateral trade system.

These conditions have yet to be completed, and sane people hope they won’t, but the people making the decisions are ideologues who don’t care about individual consumers or the overall health of the domestic economy as proven by the tariff and trade wars already occurring. The US must confront the conditions that caused its ship building industry to flee. Most of those reasons were revealed in a recent Sputnik article, “Five Factors Behind the Decline of US Military Shipbuilding,” which is essentially all that remains of that industry:

Post-Cold War Decline

American military shipbuilding peaked in the 1980s, with 150 major warships displacing over 1.2M tons added to the fleet during the decade, including three Nimitz-class carriers, Los Angeles-class attack subs, Ohio-class SSBNs and Ticonderoga, Arleigh Burke, Spruance and Perry-class destroyers, cruisers and frigates.

After the Cold War ended, the US cut its Navy in half, closed shipyards, and lost skilled workers against the background of the country's broader deindustrialization and transition to a service [financialized] economy.

Monopolization

In the 90s, large shipyards including Avondale, Fore River, Todd Pacific, Philadelphia, Charleston, and Mare Island were closed, downsized or converted for civilian use, creating monopolists among remaining producers like Huntington Ingalls Industries (HII) and General Dynamics, and jacking up contract costs.

Aging Infrastructure

Modern US shipyards are often straddled with aging infrastructure, impacting construction of new vessels, and the introduction of new technologies.

Skilled Labor Shortages

The loss of skilled tradesmen has taken a particularly heavy toll, with HII’s Newport News yard, building the Gerald Ford-class carriers, constantly facing a lack of welders, electricians, pipe and shipfitters.

A House Armed Services Committee hearing this month found that tough working conditions, and wages often just a couple dollars more than those at fast-food joints, are making it difficult for the industry to retain workers. Naval engineers are also underpaid and underappreciated.

Design Flaws, Red Tape

Design issues have turned some vessels, like the Zumwalt destroyer, Ford-class carriers and Littoral Combat Ships (LCSs) into costly nightmares, shrinking acquisition of Zumwalts from 32 to 3, and LCS warships being already being phased out after a decade or less of service.

The result? Major cost overruns, program delays and bureaucracy slowing acquisition to a crawl, even as manufacturers collect bigger and bigger paydays.

There are some other facts revealed in the article not included above. Once the shipyards were closed and the companies financialized, their assets were sold off and the land converted to other uses, which is a huge issue because shipyards can’t be erected in any old place and those best locations are mostly all gone. Then there’re the human and other resources required—all those closed steel mills and depleted iron and coal fields have their own huge impact. As noted above, building new “vessels is not like flipping a light switch.” A massive number of excuses have been put forth over the years in an attempt to provide solace to US politicos which seem to be made to obscure Wall Street’s role in the destruction of US shipbuilding. Even the US-based Heritage Foundation has bemoaned the woeful state of the US Navy and US shipbuilding for many years citing the same reasons as Sputnik. Its most recent report is based on 2023 data which reflects the state of shipbuilding. For those curious about more information on this important global industrial sector, I suggest this article, “Global Shipbuilding Race of 2025.” The top three shipbuilding nations are China, South Korea and Japan, in that order. China is likely to stay #1 having recently vowed it “will unswervingly strengthen and improve the state-owned capital and state-owned enterprises.”

Despite the rhetoric, there’s no indication Team Trump has any policy aimed at controlling the financializing of what little remains of US industry which is the real reason for the lack of US manufacturing capacity—it was moved overseas by Trump’s financial cronies and the Duopoly they control. Effectively, what we’re being shown is a kabuki theatre designed to take out eyes and minds away from focusing on the massive rent seeking and reaping by financialized monopolies and monopsonistic marketplaces. Congress takes its orders and bribes from the usual Wall Street and AIPAC suspects and fulfills their duty to them without another thought. About the only difference between Team Trump and Team Biden is the level of bombast and lies. Honest media reports from sources outside the Outlaw US Empire help keep us informed of what’s actually being done.

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