Trump's Maritime Action Plan seeks to resurrect a dead industry — but can port fees and prosperity zones reverse 80 years of decline?
Executive Summary
- The Trump administration released its Maritime Action Plan on February 13, proposing port fees on foreign-built vessels that could generate up to $1.5 trillion over a decade to fund a U.S. shipbuilding renaissance — the most ambitious American industrial policy since the Interstate Highway Act.
- The gap is staggering: China delivered 972 commercial ships in 2023 versus America's 7, commands 56% of global output and 69% of new orders, while the U.S. operates just 80 internationally-trading vessels against China's 5,500+.
- The plan faces a fundamental paradox: the very fees designed to fund American shipyards will raise costs for every American importer, potentially triggering a maritime version of the Smoot-Hawley effect at a time when global supply chains are already strained by tariff wars.
Chapter 1: The Shipyard That Died — How America Lost the Seas
The numbers tell a story of industrial annihilation. During World War II, American shipyards launched a vessel every 42 days on average, producing over 5,500 ships that carried the Allies to victory. The Kaiser Shipyards in Richmond, California alone built 747 ships in four years. It was the greatest industrial mobilization in human history.
Eighty years later, the U.S. commercial shipbuilding industry is functionally extinct. In 2023, American yards delivered just 7 commercial vessels. China delivered 972. According to CSIS, China's largest state-owned shipbuilder — the China State Shipbuilding Corporation (CSSC) — built more commercial vessels by tonnage in 2024 alone than the entire U.S. shipbuilding industry has built since the end of World War II.
The decline was not accidental. It was the result of deliberate policy choices. The Jones Act of 1920, which requires vessels moving cargo between U.S. ports to be American-built, American-owned, and American-crewed, was intended to protect the domestic industry. Instead, it created a captive market so small and so expensive that innovation atrophied. American-built ships cost three to five times more than their Korean or Chinese equivalents. The domestic fleet shrank from over 1,000 oceangoing vessels in the 1950s to roughly 80 today.
Meanwhile, China executed a systematic, decades-long strategy to dominate global shipbuilding. Through its "military-civil fusion" doctrine, Beijing integrated commercial and military production at its shipyards, giving the People's Liberation Army Navy access to infrastructure, investment, and intellectual property acquired from commercial contracts. Foreign companies — including firms from U.S.-allied nations — purchase 75% of ships built at these dual-use yards, effectively subsidizing China's naval expansion.
The result in 2025: China's shipbuilding output reached 53.69 million deadweight tonnes, up 11.4% year-on-year, accounting for 56.1% of the global total. New orders hit 107.82 million DWT, representing a 69% global market share. Holding orders stood at 274.42 million DWT — 66.8% of the global total.
The United States, by contrast, builds fewer commercial ships annually than Luxembourg.
Chapter 2: The Maritime Action Plan — Anatomy of a Gamble
Released on February 13, 2026, the Maritime Action Plan is a 30-page blueprint authored by the Office of Management and Budget — which assumed oversight after the White House Maritime Office was dissolved. Its core pillars:
1. Maritime Security Trust Fund
The centerpiece is a new dedicated funding stream through tonnage fees on cargo arriving at U.S. ports aboard foreign-built ships. The plan models two scenarios:
- A fee of 1 cent per kilogram would generate $66 billion over 10 years
- A fee of 25 cents per kilogram would generate $1.5 trillion over 10 years
The trust fund mirrors the Highway Trust Fund model that built America's interstate system in the 1950s. The plan does not specify which fee level will be adopted.
2. Maritime Prosperity Zones
Designated geographic zones offering tax incentives, streamlined regulations, and federal financing to attract shipbuilding and maritime industry investment — modeled on the special economic zones that powered China's own industrial rise.
3. Fleet Expansion Requirements
Strengthened cargo preference rules mandating that certain government and strategic cargoes move on U.S.-built, U.S.-flagged vessels. This expands the existing framework where only 50% of government-impelled cargo must travel on American ships.
4. Workforce Development
Modernization of the U.S. Merchant Marine Academy, expanded mariner training programs, and financial incentives to attract workers to an industry that has hemorrhaged talent for decades.
5. Regulatory Streamlining
Refundable production-based tax credits tied to vessel output, new credit and loan programs for shipyard capital projects, and reduced regulatory barriers to yard expansion.
The bipartisan SHIPS for America Act — reintroduced by Republican Senator Todd Young and Democratic Senator Mark Kelly — provides the legislative framework. "It's time to make American ships again," Young declared.
What the plan does NOT address:
- A realistic timeline for when the first new American-built commercial vessels might actually compete on global markets
- How to bridge the 3-5x cost gap with Asian yards
- The chicken-and-egg problem: no orders without competitive yards, no competitive yards without orders
Chapter 3: The Fee Paradox — Who Really Pays?
Here lies the plan's central contradiction. The fees designed to fund American shipbuilding will be paid by American consumers.
Nearly every consumer good that arrives in the United States by sea comes on a foreign-built vessel. In 2025, approximately 26 million TEU (twenty-foot equivalent units) of containerized cargo entered U.S. ports. The overwhelming majority arrived on ships built in South Korea, Japan, or China.
At the lower fee scenario (1 cent/kg), a standard 40-foot container averaging 20,000 kg of cargo would incur approximately $200 in additional fees. At the higher scenario (25 cents/kg), that same container would face $5,000 in fees — a cost inevitably passed to importers and ultimately consumers.
Former Federal Maritime Commission Chairman Louis Sola warned: "Redistributing capital through a fee on essential imports and exports threatens to eliminate the very margins that keep our domestic industries viable."
| Metric | United States | China | South Korea | Japan |
|---|---|---|---|---|
| Commercial ships delivered (2023) | 7 | 972 | ~170 | ~110 |
| Global market share (output, 2025) | <1% | 56.1% | ~23% | ~14% |
| New orders share (2025) | <1% | 69% | ~18% | ~10% |
| Average build cost ratio | 3-5x | 1x (baseline) | 1.2x | 1.3x |
| Internationally-trading vessels | ~80 | 5,500+ | ~800 | ~2,100 |
| Major commercial shipyards | ~7 | 100+ | ~20 | ~15 |
This arrives at the worst possible time. The Trump administration's broader tariff regime has already raised consumer prices. Adding maritime fees on top of 25-54% tariffs on imported goods creates a compounding cost structure that risks accelerating the inflationary pressures the administration claims to be fighting.
Chapter 4: Historical Parallels — When Nations Built Fleets
The British Naval Race (1889-1914)
When Britain felt its maritime supremacy threatened by Germany's naval expansion under Kaiser Wilhelm II, Parliament passed the Naval Defence Act of 1889, committing to a "two-power standard" — the Royal Navy should equal the combined strength of the next two largest navies. The cost was enormous: naval spending consumed 25-30% of the national budget. Britain won the naval race but at the cost of domestic investment that contributed to its long-term industrial decline.
Japan's Postwar Miracle (1956-1980)
Japan deliberately targeted shipbuilding as a strategic export industry after World War II. Through coordinated industrial policy — low-interest government loans, strategic yard consolidation, and aggressive technology adoption — Japan went from rubble to the world's largest shipbuilder by the 1960s. The strategy succeeded because Japan matched subsidies with genuine competitive innovation: standardized production methods, economies of scale, and quality control that became the model for lean manufacturing.
South Korea's Catch-Up (1970-2000)
Korea followed Japan's playbook with even greater government direction. Hyundai Heavy Industries built the world's largest shipyard at Ulsan before it had a single order. Daewoo and Samsung followed. By the 2000s, South Korea had surpassed Japan. The key was not just subsidies but also the creation of massive, efficient yards from scratch rather than trying to retrofit legacy infrastructure.
China's Conquest (2000-present)
China's approach combined elements of all three predecessors but at unprecedented scale. State-owned enterprises received virtually unlimited capital. Subsidies were opaque and massive. Military-civil fusion meant commercial yards could be repurposed for naval production instantly. The result was not just market dominance but structural dependence: the world's shipping companies now rely on Chinese yards because no alternative exists at scale.
The American Dilemma:
Every successful shipbuilding revival in history shared one common factor: a government willing to sustain investment for decades, not just years. Japan's took 20 years. Korea's took 30. China's has been running for 25 years and counting. The Maritime Action Plan proposes a 10-year funding horizon — and that assumes Congressional approval, sustained political will across multiple administrations, and a willingness to absorb higher import costs for a generation.
Chapter 5: Scenario Analysis
Scenario A: The Highway Analogy Works (20%)
Premise: Congress passes the SHIPS Act, the Maritime Security Trust Fund is established at a meaningful fee level, and sustained investment over 15-20 years gradually rebuilds American shipbuilding capacity.
Why 20%: The Interstate Highway Act succeeded because it served an immediate, broadly felt need (automobiles). Shipbuilding serves a diffuse national security interest that few voters experience directly. The bipartisan SHIPS Act has support but has "not made swift progress" despite a year of advocacy. Historical precedent: Japan and Korea succeeded with far more centralized decision-making than the U.S. political system permits. The Highway Trust Fund took 6 years from proposal to passage — and that was during the Cold War consensus.
Trigger: SHIPS Act passage by Q4 2026 with a fee of at least 5 cents/kg.
Scenario B: Symbolic Policy, Minimal Impact (50%)
Premise: The plan generates headlines and modest funding but fails to fundamentally alter the cost structure. Fees are set at the lower end (1 cent/kg or less), generating $66 billion over a decade — significant on paper but insufficient to close the 3-5x cost gap. Some yards receive upgrades; a few niche vessels are built; China's dominance remains unchallenged.
Why 50%: This is the most common outcome of American industrial policy. The Section 301 penalties on Chinese-linked vessels were already paused for one year under the U.S.-China trade agreement — suggesting the administration's own trade priorities may undermine its maritime goals. The OMB-authored plan notably lacks specific cost projections for building competitive yards. Congressional attention span for industrial megaprojects is historically short, especially when costs are visible (higher import prices) and benefits are diffuse (a larger fleet in 15 years).
Historical parallel: The U.S. Synthetic Fuels Corporation (1980), created to reduce oil dependence, received $20 billion in funding authority but was abolished five years later having produced negligible output — the political coalition collapsed when oil prices fell.
Trigger: Fees set below 5 cents/kg; SHIPS Act delayed beyond 2027.
Scenario C: Protectionist Backlash (30%)
Premise: Port fees, combined with existing tariffs, significantly raise import costs. Retailers, agricultural exporters, and manufacturers lobby aggressively against the plan. Allied shipping nations — Japan, Korea, Europe — view the fees as punitive and retaliatory, undermining the very alliances the U.S. needs to counter China's maritime dominance. The plan becomes a trade policy liability.
Why 30%: The Smoot-Hawley precedent is instructive. When the U.S. raised tariffs in 1930 to protect domestic industries, trading partners retaliated, and global trade collapsed by 65%. Today's maritime fees would affect not just Chinese vessels but ships built in allied nations — South Korea, Japan, and European yards. The New York Times has already highlighted the plan's lack of progress since April 2025. Industry skeptics like former FMC Chairman Sola have explicitly warned about competitive harm.
Trigger: Fee implementation without allied coordination; retaliatory port charges by trading partners.
Chapter 6: Investment Implications
Direct beneficiaries:
- Huntington Ingalls Industries (HII): America's largest military shipbuilder would benefit from expanded yard capacity and workforce programs, though commercial shipbuilding remains distant from its core business
- General Dynamics (GD/NASSCO): Operates one of the few U.S. yards building commercial vessels
- Philly Shipyard (PHLY): Small-cap pure play on U.S. commercial shipbuilding
- Steel producers (NUE, STLD): Maritime construction requires enormous quantities of steel plate
Indirect beneficiaries:
- Port infrastructure and logistics: Increased investment in Maritime Prosperity Zones
- Workforce training companies: The plan explicitly calls for expanded mariner education
- Defense primes broadly: The plan reinforces the military-industrial linkage between commercial and naval shipbuilding
At risk:
- Retailers and importers (WMT, AMZN, TGT): Higher port fees mean higher input costs
- Container shipping lines (Maersk, COSCO): Fee pass-through dynamics may reduce volume
- Agricultural exporters: Retaliatory measures from trading partners could hurt U.S. farm exports
The structural bet: This is ultimately a bet on whether the United States can replicate the industrial policy playbook that worked for Japan, Korea, and China — but in a political system designed to prevent exactly that kind of sustained, centralized investment. Smart money hedges: own the defense names (HII, GD) that benefit regardless, while watching for the SHIPS Act timeline as the key legislative catalyst.
Conclusion
The Maritime Action Plan represents a rare moment of bipartisan consensus on an uncomfortable truth: the United States has lost control of a strategic industry that underpins its economic and military power. Every aircraft carrier, every submarine, every ton of imported goods depends on a shipbuilding ecosystem that America has allowed to wither while China built the largest fleet the world has ever seen.
But consensus on the problem is not consensus on the solution. The plan's reliance on import fees to fund domestic industrial revival creates a policy paradox: raising the cost of trade to enable future trade capacity. History suggests this works only when the political commitment spans decades and the investment reaches a scale sufficient to achieve genuine competitiveness — not just subsidized production.
The Maritime Action Plan is either the opening move in America's most ambitious industrial renaissance since World War II, or an expensive monument to a problem the political system refuses to solve. The answer depends not on the plan itself, but on whether Congress and successive administrations have the stamina to see it through.
In a world where 90% of global trade moves by sea, whoever builds the ships writes the rules. Right now, those rules are being written in Mandarin.
Sources: White House Maritime Action Plan (Feb 13, 2026), CSIS China Shipbuilding Analysis, FreightWaves, Reuters, China Ministry of Industry and Information Technology, Congressional Research Service
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