President Trump has signed an executive order to continue targeting China's shipbuilding industry
On April 9, President Donald Trump signed an executive order titled "Revitalizing America's Position as a Maritime Power," which aims to revitalize the country's struggling shipbuilding industry, strengthen its maritime workforce, and expand U.S. influence in global shipping.
The core of the executive order is the completion of the Maritime Operations Plan (MAP) within 210 days, requiring the Assistant to the President for National Security Affairs (APNSA) to coordinate with a number of Cabinet secretaries to develop a comprehensive strategy.
Some of the key initiatives are:
Continue to investigate the Chinese shipbuilding industry
The executive order directs the Office of the United States Trade Representative (USTR) to take appropriate measures against China's "unfair competition" in the shipbuilding industry.
USTR will coordinate with relevant agencies to collect information required by law to support the implementation of the action, and work with the U.S. Attorney General and the Secretary of Homeland Security to enforce restrictions, fee collection, and tariff penalties. On the other hand, based on the Section 301 findings, USTR will also consider, in accordance with the law, taking necessary measures, including imposing tariffs, against Shore Bridge (STS) container cranes manufactured, assembled, or produced using components of Chinese origin, or STS manufactured anywhere in the world by companies owned, controlled, or materially influenced by Chinese nationals.
Impose port charges and other charges
To prevent the transshipment of cargo through ports in Canada or Mexico and then overland entry into the United States to avoid port maintenance fees (HMF) and other chargeable charges, the Secretary of Homeland Security will take necessary steps, including legislation, as required by law to:
1. All foreign goods arriving in the United States by sea must be cleared by U.S. Customs and Border Protection (CBP) at a U.S. port of entry and pay duties, taxes, and other dues;
2. For goods that enter Canada and Mexico by land after transshipment through a North American port, if they are not substantially processed in the country of transit (determined by CBP), in addition to paying the full amount of the port maintenance fee, an additional 10% service fee shall be paid to cover the increased regulatory costs of CBP.
Increase the U.S. -flagged merchant fleet
The secretary of Transportation should submit a proposal within 180 days. The proposal should include the following:
(a) Ensure the availability of a sufficient number of merchant ships flying the United States flag in times of crisis;
(b) Create incentives to both increase the size of a ready-made national security reserve fleet built by the United States, crewed by the United States, and flown under the United States flag, and to increase the proportion of U.S. merchant ships engaged in international trade;
(3) Optimize existing subsidy policies to include specific construction or conversion costs to provide incentives for the commercial shipping industry to operate U.S.-flagged international commercial vessels with military applications.
Encourage Allies to invest
USTR shall initiate consultations with treaty Allies, partners, and other like-minded countries within 90 days of the order's enactment. The U.S. Secretary of Commerce needs to include incentives in the Plan to attract allied shipping companies to invest in the United States and enhance U.S. shipbuilding capabilities.
Establish a maritime security trust fund
A Maritime Safety Trust Fund is proposed to be established as a stable source of funding for projects under the Plan. The proposal needs to examine how to establish a more reliable and dedicated funding mechanism for projects supported by the Plan through new or existing tariff revenues, fines, fees and taxes.
Financial incentives for shipbuilding
Establish a financial incentive program to encourage private sector investment by:
1. Construction of commercial ship components, spare parts and whole ships;
2. Commercial shipyard capital reconstruction;
3. Support the capital improvement of commercial ship repair facilities and dry docks through appropriations;
4. Loans and loan guarantees that comply with the Federal Credit Reform Act.
Establish a "maritime flourishing zone"
It is proposed to create "Maritime Prosperity Zones" to incentivize capital investment in U.S. maritime industries and waterfront communities.
Development of seafarer training/education
A comprehensive assessment of seafarers' training and education is required. This includes analyzing the potential for a new Merchant Marine Academy and establishing a national Maritime scholarship to provide scholarships for U.S. experts to study abroad and for foreign experts to teach at U.S. colleges and universities.
Improve procurement efficiency
The U.S. government's ship procurement optimization plan is to be developed within 90 days. The program is designed to provide U.S. shipping companies with market demand forecasts to help them plan infrastructure, workforce and intellectual property investments. At the same time, procurement reform, including optimizing personnel structure and procurement strategy, streamlining approval process, adopting commercial procurement and modular design to reduce design changes; Clean up redundant approval processes and regulations, prioritize the use of industry common standards and ready-made parts in the United States to expand mass production and avoid delays and cost increases caused by repeated design modifications.
Assess the shipbuilding industry
Within 45 days, the U.S. Cabinet should complete a review of the U.S. Government shipbuilding industry with recommendations to increase the number of participants and competitors in the U.S. shipbuilding industry and reduce cost overruns and delays in surface/underwater and unmanned systems programs.
The core of the executive order is the completion of the Maritime Operations Plan (MAP) within 210 days, requiring the Assistant to the President for National Security Affairs (APNSA) to coordinate with a number of Cabinet secretaries to develop a comprehensive strategy.
Some of the key initiatives are:
Continue to investigate the Chinese shipbuilding industry
The executive order directs the Office of the United States Trade Representative (USTR) to take appropriate measures against China's "unfair competition" in the shipbuilding industry.
USTR will coordinate with relevant agencies to collect information required by law to support the implementation of the action, and work with the U.S. Attorney General and the Secretary of Homeland Security to enforce restrictions, fee collection, and tariff penalties. On the other hand, based on the Section 301 findings, USTR will also consider, in accordance with the law, taking necessary measures, including imposing tariffs, against Shore Bridge (STS) container cranes manufactured, assembled, or produced using components of Chinese origin, or STS manufactured anywhere in the world by companies owned, controlled, or materially influenced by Chinese nationals.
Impose port charges and other charges
To prevent the transshipment of cargo through ports in Canada or Mexico and then overland entry into the United States to avoid port maintenance fees (HMF) and other chargeable charges, the Secretary of Homeland Security will take necessary steps, including legislation, as required by law to:
1. All foreign goods arriving in the United States by sea must be cleared by U.S. Customs and Border Protection (CBP) at a U.S. port of entry and pay duties, taxes, and other dues;
2. For goods that enter Canada and Mexico by land after transshipment through a North American port, if they are not substantially processed in the country of transit (determined by CBP), in addition to paying the full amount of the port maintenance fee, an additional 10% service fee shall be paid to cover the increased regulatory costs of CBP.
Increase the U.S. -flagged merchant fleet
The secretary of Transportation should submit a proposal within 180 days. The proposal should include the following:
(a) Ensure the availability of a sufficient number of merchant ships flying the United States flag in times of crisis;
(b) Create incentives to both increase the size of a ready-made national security reserve fleet built by the United States, crewed by the United States, and flown under the United States flag, and to increase the proportion of U.S. merchant ships engaged in international trade;
(3) Optimize existing subsidy policies to include specific construction or conversion costs to provide incentives for the commercial shipping industry to operate U.S.-flagged international commercial vessels with military applications.
Encourage Allies to invest
USTR shall initiate consultations with treaty Allies, partners, and other like-minded countries within 90 days of the order's enactment. The U.S. Secretary of Commerce needs to include incentives in the Plan to attract allied shipping companies to invest in the United States and enhance U.S. shipbuilding capabilities.
Establish a maritime security trust fund
A Maritime Safety Trust Fund is proposed to be established as a stable source of funding for projects under the Plan. The proposal needs to examine how to establish a more reliable and dedicated funding mechanism for projects supported by the Plan through new or existing tariff revenues, fines, fees and taxes.
Financial incentives for shipbuilding
Establish a financial incentive program to encourage private sector investment by:
1. Construction of commercial ship components, spare parts and whole ships;
2. Commercial shipyard capital reconstruction;
3. Support the capital improvement of commercial ship repair facilities and dry docks through appropriations;
4. Loans and loan guarantees that comply with the Federal Credit Reform Act.
Establish a "maritime flourishing zone"
It is proposed to create "Maritime Prosperity Zones" to incentivize capital investment in U.S. maritime industries and waterfront communities.
Development of seafarer training/education
A comprehensive assessment of seafarers' training and education is required. This includes analyzing the potential for a new Merchant Marine Academy and establishing a national Maritime scholarship to provide scholarships for U.S. experts to study abroad and for foreign experts to teach at U.S. colleges and universities.
Improve procurement efficiency
The U.S. government's ship procurement optimization plan is to be developed within 90 days. The program is designed to provide U.S. shipping companies with market demand forecasts to help them plan infrastructure, workforce and intellectual property investments. At the same time, procurement reform, including optimizing personnel structure and procurement strategy, streamlining approval process, adopting commercial procurement and modular design to reduce design changes; Clean up redundant approval processes and regulations, prioritize the use of industry common standards and ready-made parts in the United States to expand mass production and avoid delays and cost increases caused by repeated design modifications.
Assess the shipbuilding industry
Within 45 days, the U.S. Cabinet should complete a review of the U.S. Government shipbuilding industry with recommendations to increase the number of participants and competitors in the U.S. shipbuilding industry and reduce cost overruns and delays in surface/underwater and unmanned systems programs.
