Five major United States labor unions have lodged a joint complaint, urging the administration to probe into subsidies provided to Chinese shipbuilders. This move comes amidst escalating tensions between the two nations. The unions involved in this action are the United Steelworkers, the AFL Maritime Trades Department, International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, and the International Brotherhood of Electrical Workers.
The shipbuilding industry has become another arena for power struggles between the United States and China. On February 29, President Biden highlighted concerns about China's increasing influence on U.S. ports, primarily through imported technologies. Over 80 percent of cranes operating in U.S. ports are manufactured in China. These ports are crucial to both international trade and domestic economy in the United States, with over 31 million jobs linked to them and generating over $5.4 trillion in economic value - accounting for half of the total value in the country's economy.
Given the high volume of ships passing through U.S. ports daily, these can potentially pose a security threat to America. According to US Trade Representative Katherine Tai, China has created dependencies and vulnerabilities in sectors such as steel, aluminum, solar energy, batteries, and critical minerals. Following President Biden's announcement regarding the petition, shares of Chinese shipbuilders fell by over 3%. "If we do not act quickly, we will soon be dependent on China not only for the products their vessels bring into our ports but also for the ships themselves," warned McCall.
China currently holds a dominant position in the global shipbuilding industry after a merger in 2019 consolidated their two largest ship makers into a state-owned industrial giant. The vast capital possessed by this company poses significant competition challenges for international rivals. Jens Eskelund, president of the European Union Chamber of Commerce in China stated that "The Chinese shipbuilding industry received extensive policy-support in the past, facilitating the development of several domestic champions. The dominant market position held by these players today, as well as their immense size — largely a direct result of this support — means, we assess, they generally no longer need subsidies to be globally competitive." Meanwhile, the United States continues to struggle in its efforts to revamp the naval fleet and is currently in negotiations with Japan for assistance.
