Federal Action to Revitalize Shipbuilding - What You Need to Know

USTR's recent trade action to levy fees on Chinese ships marks a crucial step, yet further actions are needed to revitalize American shipbuilding. Here's a look at what maritime businesses, shipyards, and marine suppliers should monitor.

**Proposed Tariffs** USTR has suggested elevating duties to 100% on Chinese Ship-to-Shore Cranes, Cargo Containers, Chassis, and Chassis parts. Key dates to note: Comments on the proposal are due by May 19th, with the Public Hearing scheduled for the same day (participants must request to join by May 8th).

**Shipbuilding Funding** The Administration is crafting a Maritime Action Plan (MAP) set to reach the President in the fall, outlining funding initiatives for shipbuilding:
--Maritime Security Trust Fund: OMB will propose legislation for a funding source to consistently back MAP programs, including shipbuilding (potentially funded by USTR Sec. 301 fees on Chinese ships).
--Shipbuilding Private Investment Program: DOT will propose legislation encouraging private sector investments in ship components, supplies, and yards.
--Existing Authorities: DOD will spearhead an evaluation of current options, like Defense Production Act Title III authorities, to bolster and broaden the Maritime Industrial Base.
--Buy American: The Maritime Action Plan notes adherence to the Buy American Act, a pivotal requirement backing American manufacturing.

**Congressional Involvement** Congressional action is needed to establish funding for the shipbuilding sector. The Administration's Maritime Action Plan will present at least two proposals for Congress's consideration. Additionally, bipartisan legislation—the SHIPS Act—has been introduced by Members of Congress to finance and bolster domestic shipbuilding endeavors.

What does this all mean for businesses in the shipping arena?
Marine equipment businesses that can adapt and scale production could benefit from new tariffs on Chinese cargo equipment (i.e., cranes, chassis) while port operators could see increased costs.
Shipyards that build vessels for the Navy and the Coast Guard could add commercial shipbuilding to their product lines.
Ship suppliers may benefit from an increase in domestic commercial shipbuilding.

But, this all depends on the completion of the Maritime Action Plan and Congress passing legislation to finance domestic shipbuilding. Feel free to reach out to discuss how to navigate these next steps