The United States New Shipping Act : Posing Challenges To Sino-US Trade And The International Shipping Market

The United States New Shipping Act : Posing Challenges to Sino-US Trade and the International Shipping Market

At a time when global trade and maritime transport patterns are evolving, the proposed new ship bill in the United States has attracted widespread attention. There are deep backgrounds and multiple purposes behind this bill, and its broad scope will have a non-negligible impact on the United States itself, China-U.S. trade, and the international shipping market, and its prospects are mixed.

In context, the U.S. shipbuilding industry has experienced a marked decline over the past few decades. By contrast, China's shipbuilding industry is booming and dominating the global market. The United States feels deeply that its maritime power has been affected by the decline of its shipbuilding industry, while its over-reliance on foreign shipping also poses challenges to its economic security. In this context, the United States has attempted to revitalize its shipbuilding industry through legislative means, reduce its dependence on foreign ships, enhance its maritime capabilities, and counter competitive pressure from China's shipbuilding industry.

The main elements of the bill are highly targeted and oriented. On the one hand, in terms of the proportion of goods shipped, it stipulates that at least 10 per cent of China's exports to the United States for the next 15 years must be shipped by ships built, registered and equipped with U.S. crews, with an increase of 1 per cent each year beginning in the fifth year after the act takes effect until 10 per cent. At the same time, US government imports must all be transported by US-flagged ships, increasing the proportion of domestic ships in government import transport. On the other hand, the ban on suspending tonnage and lighthouse duties for "vessels registered in relevant foreign registries," including Chinese vessels, means that Chinese vessels will face additional duties and charges in America ports. In addition, the bill also expands the scope of shipbuilding cooperation between the United States and South Korea, granting preferential policies to relevant ships and shipowners, which Korean shipbuilders are expected to benefit from.

Its impact is widespread and complex. For the United States itself, the positive side is likely to promote shipbuilding orders increase, promote industrial development, protect maritime transport capacity and economic security, promote technological research and development innovation; The negative side is due to the high cost of shipbuilding in the United States, the lack of technological advantage and the shortage of workers. This could lead to higher transport costs for importers, reduced logistics efficiency, and disruptions in port operations, ultimately increasing consumer burdens, and it is doubtful whether long-term reliance on outsourcing can truly revive local shipbuilding. In terms of trade between China and the United States, the bill clearly violates the WTO's free trade principles, will lead to an escalation of trade friction, increase the transport cost and logistics complexity of Chinese enterprises' exports to the United States. It will have a great impact on cross-border e-commerce and other industries, and will also affect the international market share and competitiveness of relevant Chinese industries. From the international reaction, the bill has been accused of violating the principle of free trade, which may cause discontent in other countries and complicate the international trade landscape, and major shipping powers such as Asia may also take corresponding measures to counter it.

At present, the bill was formally introduced by both parties in the US Congress on December 19, 2024 and is still in the proposal stage. Its final adoption and the concrete effect of its implementation remain to be seen, but it is certain that the Act will be an important factor influencing global shipping and trade patterns and that the international community will continue to follow up on its development.