The US Trade Representative’s Office (USTR) stated that its investigation found that the Chinese Communist Party unfairly suppresses costs through non-market policies, gaining a dominant position in the global maritime, logistics, and shipbuilding industries. According to Section 301 of the US Trade Act, punitive actions can be taken.
On Thursday, January 16, US Trade Representative Dai Qi said, “Today, the US ranks 19th in commercial shipbuilding, with less than 5 ships constructed annually, while China builds over 1,700 ships per year. In 1975, the US ranked first globally, only building just over 70 ships annually at that time.”
Dai Qi added, “Beijing has been strategically dominating these industries, disrupting fair, market-oriented competition, increasing economic security risks, and posing the biggest obstacle to reviving the US industry… These investigation results lay the foundation for taking urgent actions to invest in the US and strengthen our supply chains.”
The report found that over the past three decades, the Chinese Communist Party has been pursuing dominance in the maritime, logistics, and shipbuilding industries, with increasingly aggressive and specific objectives.
The report highlighted the CCP’s exceptional control over shipbuilding, maritime, and logistics enterprises, allowing the Party to direct government agencies and private businesses to achieve industrial goals, ensuring alignment between corporate decision-making and government objectives.
The report noted that CCP infringement on labor rights, use of forced labor, and excess steel production have provided unfair non-market advantages to these industries, depriving market-oriented enterprises of commercial opportunities, leading China to dominate these sectors, reducing competition, increasing reliance on China, and decreasing supply chain flexibility.
USTR only released the investigation results on Thursday, without specific punitive recommendations against the CCP. The next steps will be determined by the incoming President Trump administration on January 20.
Previously, in response to requests from the United Steelworkers and four other US unions, USTR initiated this investigation in April 2024 under Section 301 of the Trade Act of 1974. This provision allows the US to penalize foreign countries engaged in “unfair” or “unreasonable” practices harming American commerce.
This provision has been the legal basis for the high tariffs imposed on Chinese imports by both the Trump and Biden administrations since 2018.
US Senator Mark Kelly stated that the report underscores the necessity of revitalizing the American shipbuilding and maritime industries.
Kelly commented, “The PRC’s unfair trade practices are making China a maritime hegemon, harming American workers and our national security.”