The EO reflects an increasingly widespread view in Washington that shipbuilding is a critical strategic sector that is central to long-term economic competitiveness and national security. This perspective—echoed in the rhetoric of a growing number of senior political and military leaders across the political spectrum—is driven by several interrelated factors.
First, the erosion of the United States’ shipbuilding capacity poses considerable challenges to U.S. military readiness. Diminished industrial capacity limits the United States’ ability to rapidly produce or repair warships and merchant ships that can be used for national security needs. Dependence on foreign-built or foreign-operated vessels—especially Chinese-built and Chinese-flagged vessels—risks leaving the United States significantly restrained in a crisis or conflict, particularly when reliable sealift capabilities are essential for sustaining military operations overseas.
Second, a revived shipbuilding industry could provide significant economic opportunity for U.S. workers. Estimates from the U.S. Maritime Administration suggest that employment in the shipbuilding sector offers wages nearly 50 percent higher than the average private sector wage. Nurturing this industry could provide stable job opportunities for tens of thousands of U.S. workers and begin to reverse a decades-long trend of evaporating employment in the manufacturing sector.
Finally, without coordinated action to build up capacity in the United States and allied countries, China will likely continue to extend its dominance over the shipbuilding industry. That matters because China’s colossal maritime industrial base is one factor underpinning its rapid naval expansion, which has already begun to destabilize the fragile military balance in the Indo-Pacific. Today, the People’s Liberation Army Navy (PLAN) already fields more warships than the U.S. Navy and is projected to operate a fleet of 425 ships by 2030. This expansion is largely facilitated by China’s extensive network of dual-use shipyards, which simultaneously produce both commercial vessels and advanced warships.
More broadly, the EO aligns with President Trump’s agenda to reshore U.S. manufacturing and strengthen domestic industrial capacity—a central pillar of his second-term economic policy.
Q2: What specifically does the EO do, and what impact might it have?
A2: The EO underscores the Trump administration’s prioritization of restoring U.S. maritime industrial strength, but many questions remain on how the plan will be carried out.
A central component is the establishment of a Maritime Action Plan, which tasks the national security advisor with coordinating efforts across several government agencies—including the Department of Defense, the Department of Commerce, the Department of Transportation, the Department of Labor, the Department of Homeland Security, and the Office of the United States Trade Representative (USTR)—to develop a roadmap for all subsequent executive and legislative actions.
Among the broad range of efforts prioritized in the EO, some of the most significant are steps to authorize new investments into the industrial base, including leveraging Defense Production Act Title III authorities to facilitate direct federal investment and incentivize private capital investments into shipyards and subcomponent supply chains. The EO also establishes a maritime security trust fund to provide steady financing and introduces financial incentives to encourage private-sector investment in domestic shipbuilding.
Another key priority of the EO is to kickstart efforts to build up the trained maritime workforce needed to grow the industry. This includes reporting requirements on expanding education and training opportunities and modernizing the U.S. Merchant Marine Academy. These efforts will be critical, as the industry already faces a severe labor shortage that some analysts have pointed to as a top issue constraining U.S. shipbuilding capabilities.
One significant aspect of the administration’s approach to competing with China’s shipbuilding industry that remains unanswered in the EO is how it will approach a recent proposal by the USTR to counteract China’s anticompetitive practices in shipbuilding through a strict regime of docking fees assessed on global shipping companies with Chinese-built ships in their fleets.
Recent comments by the U.S. Trade Representative Jamieson Greer suggest that the administration is considering adjusting its approach to the fee structure after it received wide-ranging pushback during a month-long public comment period in March. The EO provides the USTR with latitude to independently determine if and how it will enact these measures.
Perhaps somewhat unexpectedly, the EO also includes two provisions directing relevant agencies to engage with allies and partner governments in consultative processes with regard to the USTR’s measures and on leveraging foreign investments into U.S. shipbuilding.
Given the important role that companies based in allies like Japan, South Korea, and Europe play in global shipbuilding supply chains, enlisting their support for U.S. efforts to shift global demand away from Chinese shipyards will be essential. Moreover, any efforts to reshore U.S. domestic shipbuilding will prove considerably more difficult without the deep technical expertise and industry experience that allies and partners can provide.
Overall, these provisions represent a meaningful policy push to rejuvenate the United States’ maritime industrial base, but sustained political and industry commitment will be essential to meeting the scale of this multi-decade challenge.
Q3: How does China’s shipbuilding dominance threaten U.S. national security?
A3: The Trump administration’s new EO (and other ongoing policy efforts discussed below) primarily focus on the economic threat of China’s shipbuilding industry. Yet Chinese shipyards also present a significant national security challenge for the United States. Over the past two decades, China has leveraged its expansive dual-use infrastructure to simultaneously dominate commercial shipbuilding markets and rapidly construct sophisticated warships for its navy.
At the core of China’s approach is its Military-Civil Fusion (MCF) strategy, which aims to jointly develop the nation’s economic development and national security strategies to achieve simultaneous breakthroughs in civilian and military industries.
China’s leading shipyards, notably those operated by the state-owned giant China State Shipbuilding Corporation, are emblematic of the MCF strategy, producing both commercial vessels and warships for the PLAN. The ability to leverage dual-use technologies, infrastructure, and materials for both commercial and naval shipbuilding allows for effectively spreading fixed costs across both sectors, optimizing resource allocation, and facilitating technological upgrades.
Concerningly, foreign capital and technology are pouring into China’s dual-use shipyards, enabling China to not just capture global commercial market share but also offset the costs of its ongoing naval buildup. According to CSIS research, foreign firms (those based outside China and Hong Kong) purchased 75 percent of the commercial output from the dual-use shipyards charged with producing vessels for China’s ongoing naval build-up.
Firms headquartered in U.S. allied countries—including Japan, South Korea, France, Greece, and Denmark—have all bought from these shipyards in recent years. Other partners, including Singapore and Switzerland, are also on these shipyards’ order books.
Most strikingly, companies based in Taiwan are deeply linked to these shipyards despite constant threats of Chinese military aggression against the island. Taiwan’s shipping juggernaut Evergreen Marine Corporation has procured over 15 percent of its fleet from shipyards that also assemble warships for the PLAN.
On top of purchasing Chinese-made ships, foreign firms are also inadvertently contributing to China’s military modernization through technology transfers. Dozens of foreign suppliers have established a presence in China, sharing valuable technologies with Chinese shipyards through licensing agreements, joint ventures, and direct sales. Chinese shipbuilders have shown a clear desire to leverage such dual-use technologies to overcome important technical hurdles, particularly in areas like marine propulsion.
By doing business with Chinese firms and transferring their technologies to Chinese shipyards, foreign firms are inadvertently aiding China’s naval modernization. That is not in the interests of the United States or its allies and partners.
The White House’s EO does not address these issues directly, but future actions by this administration or by Congress should consider these national security risks and take steps to reduce global reliance on China’s murky dual-use shipbuilding ecosystem.
Q4: How does this EO fit into broader U.S. policy movements on shipbuilding?
A4: This EO is part of a broader U.S. policy response to the strategic vulnerabilities posed by China’s shipbuilding dominance. The recent move by the White House builds upon sustained bipartisan attention that predates the current administration but has increased notably in recent months.
Central to these efforts was the USTR’s Section 301 investigation, launched in April 2024, into China’s maritime, logistics, and shipbuilding practices. The investigation concluded in January 2025, determining that China’s nonmarket practices have significantly harmed U.S. commerce and disadvantaged U.S. industry. In response, the USTR proposed imposing substantial docking fees on Chinese-built vessels calling at U.S. ports, a measure aimed at disincentivizing global shipping companies from placing orders at Chinese shipyards.
Complementing these executive measures, Congress introduced the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act in December 2024. This bipartisan legislation seeks to revitalize domestic shipbuilding by offering significant financial incentives, including tax credits, loans, and loan guarantees, to stimulate commercial production at U.S. shipyards.
A core feature of the SHIPS Act is the establishment of a “Strategic Commercial Fleet” of 250 U.S.-built, U.S.-flagged, and U.S.-crewed vessels, intended to “meet national security requirements and maintain a U.S. presence in international commercial shipping.”
The EO builds on this momentum in several ways, including by enhancing the enforcement of a harbor maintenance tax to prevent revenue loss from cargo diversions through foreign ports—a measure likely influenced by the USTR’s proposed docking fees targeting Chinese-built vessels.
By emphasizing working with allies and partners to counter China’s dominance in the maritime sector and investing in U.S. shipbuilding capacity, the EO also doubles down on rigorous engagement by U.S. Navy leadership to explore partnerships between the United States and its allies in Japan and South Korea on naval shipbuilding. These partnerships will be critical for building back both commercial and military shipbuilding in the United States.
Our CSIS report explores these issues in depth and offers a suite of policy recommendations on how to achieve these ambitious goals.
Matthew P. Funaiole is vice president of the iDeas Lab, Andreas C. Dracopoulos Chair in Innovation, and senior fellow in the China Power Project at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Brian Hart is deputy director and fellow of the China Power Project at CSIS. Aidan Powers-Riggs is an associate fellow with the iDeas Lab at CSIS.
