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Monday, May 27, 2024

U.S. Labor Unions Demand USTR Probe Into China’s Dominant Shipbuilding Practices

In a strategic maneuver that could reshape the maritime industry’s future, a coalition of U.S. labor unions, anchored by the United Steelworkers (USW), has thrust a piercing spotlight onto the monumental swell of China’s shipbuilding practices. 

With concerns that ripple through economic and national security waters, this group has steered a critical petition towards the U.S. Trade Representative (USTR), demanding an inquiry into what they view as an aggressive and unfair dominance of the global shipbuilding market by the People’s Republic of China.

A Tide of Concern

Shipbuilding
Credits: DepositPhotos

For decades, the landscape of American shipbuilding was robust and vast. However, the current picture reveals a stark contrast. 

David McCall, International President of USW, pointed to a chilling contraction—from roughly 30 major shipyards to merely a fraction, a sea change that has submerged over 70,000 shipbuilding jobs beneath its waves. 

McCall elucidates the broad impact, noting that a single commercial vessel can summon approximately 13,000 tons of steel, 60,000 gallons of paint, and 130 miles of electrical cable—materials forged and finessed by the hands of numerous USW members.

“The PRC is using commercial shipbuilding to dominate the full spectrum of global trade, choking out all competitors,” McCall stated, casting a shadow over the future autonomy of U.S. maritime interests.

An analysis by the Center for Strategic and International Studies points to a deluge of billions in subsidies that the Chinese government has directed to state-owned enterprises. 

This staunch policy has been interpreted as an overt bid to crown itself as the titan of global commercial shipbuilding—an ambition that deeply troubles U.S. industry observers.

Beyond the economic tempest, a more ominous wave approaches. As McCall underscored, China’s burgeoned capacity has led it to boast the world’s most abundant navy, toppling the United States from that historic pedestal. 

He accentuates the urgency to rebuild the Merchant Marine and reinforce the strained sinews of the supply chains spanning military and commercial sectors.

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Charting a Course for Fair Trade

Invoking Section 301 of the Trade Act of 1974—a powerful tool that empowers the President to retaliate against any foreign government’s trade practices believed to unfairly impact U.S. commerce—the unions have initiated a bid to possibly adjust the sails of international trade winds.

Joining USW in this petition are fellow unions: the International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, the International Brotherhood of Electrical Workers, and the Maritime Trades Department, AFL-CIO.

U.S. Senators Tammy Baldwin and Bob Casey have penned their support for the petition to the Biden administration, signaling a unified political fleet advocating for rejuvenation of the domestic shipbuilding industry.

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Anchoring Domestic Interests

Ship Construction
Credits: DepositPhotos

The petition dovetails with President Biden’s recent proclamation—a $20 billion infusion designed to uplift the U.S. crane manufacturing sector, directly countering China’s supremacy in this essential port infrastructure and addressing potential cybersecurity vulnerabilities of reliance on foreign-made equipment.

Matthew Paxton, President of the Shipbuilders Council of America (SCA), commends the push for an investigation. 

“The SCA applauds this effort to place a spotlight on what has been a thoroughly state orchestrated industrial campaign by China to drive out global competition in shipbuilding and ship repair with the goal of controlling international shipping and the crippling of manufacturing businesses around the world, particularly in the U.S.,” Paxton remarked.

Katherine Tai, the U.S. Trade Representative, now shoulders the weighty decision: whether to wade into these challenges with a formal investigation, with a deadline of 45 days to chart her course.

The confluence of labor, politics, and national security interests at stake in this petition reflect the high-stakes game of geopolitical chess on the high seas of worldwide commerce. 

Should these U.S. labor unions’ concerns be substantiated in a potential USTR investigation, the ramifications could send a significant ripple through the global shipbuilding ecosystem.

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