US Reportedly Probes Barriers, Subsidies And Unfair Trade Practices By China In Global Shipbuilding As Trump Tariff Threat Looms

Ahead of President Joe Biden‘s departure from office, a U.S. investigation has concluded that China engages in unfair practices to dominate the global shipbuilding industry.

What Happened: The probe, initiated by U.S. Trade Representative Katherine Tai in April, was requested by the United Steelworkers and other unions under Section 301 of the Trade Act of 1974. This revelation could lead to potential penalties against China, according to Reuters on Monday.

Investigators found that China uses financial support, barriers for foreign firms, forced technology transfer, and intellectual property theft to gain an advantage in shipbuilding, a source told Reuters. The report also highlights China’s suppression of labor costs in the maritime and logistics sectors. The findings could lead to tariffs or port fees on Chinese-built vessels.

The report indicates that China’s share in the $150 billion global shipbuilding market has grown from 5% in 2000 to over 50% in 2023, largely due to government subsidies. Meanwhile, U.S. shipbuilders’ market share has fallen below 1%. The U.S. Trade Representative’s office is expected to release the findings later this week, just before President Biden leaves office on Jan. 20.

This investigation follows previous efforts by the Biden administration to curb China’s influence through tariffs and export controls. Experts suggest that rebuilding the U.S. shipbuilding industry will require substantial investment and time.

Why It Matters: The U.S. probe into China’s shipbuilding practices has sparked significant controversy. Last year, the Chinese Ministry of Commerce criticized the investigation, calling it a “mistake on top of a mistake,” asserting that China’s industrial growth is driven by technological innovation and market competition.

Additionally, China is projected to surpass the U.S. in advanced technology and military manufacturing by 2035, as reported by the South China Morning Post. Former vice-chairman of the National People’s Congress, Lu Yongxiang, emphasized that the decline of U.S. manufacturing is irreversible, suggesting a rapidly diminishing competitive edge for the U.S.

Meanwhile, Chinese policymakers are reportedly considering allowing yuan devaluation in 2025 to counter the economic impact of Trump’s proposed potential 60% tariff on Chinese imports.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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