Growth Likely on the Horizon for America's Shipyards in 2nd Trump Administration

As the United States nears its 250-year celebration, what is old may be new again in the shipyard space. The uptick in shipyard-related legal and regulatory work during the Biden Administration has been notable and is expected to exponentially increase in the second Trump Administration. The shipping industry in this country is acutely aware that shipbuilding, once a thriving sector with over 300 American shipyards in the early 1980s, has, through closings and consolidations, shrunk to roughly 20 private and public shipyards today.¹ Those shipyards are teeming with orderbooks for U.S., government and private sector work, showing that the needs justify revisiting the shipyard space strategically on the government level. That is, growth in this area favorably impacts national security and economic stability goals.

Rebuilding America's maritime base and modernizing the industry is essential for not only maintaining a robust and capable U.S. Navy, but also for supporting a wide range of commercial and civilian vessels necessary for global trade, supply chains, economic stability and renewable energy projects, such as offshore wind farms. Shipyards and shipbuilding lie at the intersection of two of President-Elect Donald Trump's campaign promises: increasing national security and rebuilding America's industrial base. A continued focus on these promises, combined with the Biden Administration's recent emphasis on private sector partnerships, will make possible a boon for existing shipyard modernization and new shipyards in the coming years.

China currently dominates the global shipbuilding market, attracting 59 percent of new shipbuilding orders in 2023, which is double that of its closest competitor, South Korea.² In contrast, the U.S. controls a mere 0.13 percent of the market.³ This disparity raises grave concerns over China's ability to control shipbuilding prices, the global trade of essential goods and the provision of warships for key U.S. allies.

Then-presidential candidate Trump highlighted this issue in his 2016 campaign, with his first administration subsequently making it a discussion point, albeit with congressional headwinds. In March 2020, administration budget cuts reduced new ship construction by 20 percent.⁴ Yet, in December 2020, the administration unveiled "Battle Force 2045," a project aimed at boosting the Navy's fleet capacity and capability through a plan that extend well beyond the first Trump Administration. This plan recognized the maritime industrial base's importance and called for targeted investments in shipyards.

With a focus on supporting unions, green jobs and infrastructure investment, the Biden Administration also prioritized rebuilding America's shipyards. In 2021, President Biden proposed the $2.25 trillion infrastructure package, which was followed shortly thereafter by legislation aimed to improve shipyard facilities, the bipartisan Shipyard Act.⁵ Despite those efforts, these early initiatives resulted in only a small percentage of infrastructure funds to shipyards. The Shipyard Act itself languished in committee and ultimately expired without a vote. Nevertheless, the Biden Administration pivoted to a focus on public-private sector partnerships. In 2024, one of the world's largest commercial shipbuilders committed to supporting the Navy's shipbuilding program through cooperative initiatives with U.S. companies and educational and vocational programs. Also in 2024, a major private shipyard committed to playing a critical role in creating a fleet of polar icebreakers for the U.S. Coast Guard.

Now, President-Elect Trump appears to be doubling down on the efforts of private sector partnership as he prepares to take office in January 2025. During a November 2024 call with South Korean President Yoon Suk Yeol, it was reported that President-Elect Trump indicated interest in enhanced bilateral efforts between South Korean and U.S. shipbuilders to improve processes and efficiencies. It is expected that these efforts will build upon recent growth of South Korean shipbuilders in the U.S. industry, such as the December 2024 acquisition of an East Coast shipyard, Philly Shipyard. In December 2024, the bipartisan Ships for America Act was introduced in Congress, co-sponsored by Rep. Mike Waltz (R-Fla.), who is slated to become the Trump Administration's national security advisor. Waltz is a strong proponent of rebuilding America's shipping industry in acknowledgement of China's economic and security power in this space. The Shipyard Act seeks to incentivize shipyard development, including increasing the availability dry dock and repair facilities. Other key nominees for the upcoming Trump Administration also support the Shipyard Act, including likely incoming U.S. Department of State Secretary Marco Rubio and future U.S. Trade Representative Jamieson Greer.

These pre-inauguration developments indicate that U.S. shipyards are likely to see significant investments and continued incentivization of public-private partnerships aimed at modernizing and expanding their capabilities. These deals require shipyard-related corporate, regulatory, disputes and real estate expertise in particular and benefit from the expectation of early significant bipartisan support.

Notes 

¹ Interview with Sen. Mark Kelly (D-Ariz.) and Rep. Mike Waltz (R-Fla.) by Dr. Seth G. Jones, Center for Strategic and International Studies Senior Vice President, International Security Program (Sept. 25, 2024).

² "China claims 59% of new shipbuilding orders in global market in 2023," SteelOrbis (Jan. 3, 2024).

³ Maj. Jeffrey L. Seavy, U.S. Marine Corps (Retired), "The United States Must Improve Its Shipbuilding Capacity," U.S. Naval Institute Proceedings, February 2024.

⁴ "Trump Slashes New Navy Ship Orders, Threatens to Cancel Shipyard Worker's Collective Bargaining Agreements," International Brotherhood of Electrical Workers (March 10, 2020).

⁵ S.1441—117th Congress (2021-2022); H.R.2869—117th Congress (2021-2022).