The legislative effort would be a major step toward reshoring production capacity for an important industry.
First came the petition from American labor unions. Then came the investigation and its findings. Then came the executive orders from the White House. And then came the federal legislative effort to back it all up.
The Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, introduced in Congress last month, would bolster the greatly diminished the commercial shipbuilding industry in this country, which is now largely consolidated offshore.
It didn’t used to be this way. In 1975, the United States employed 180,000 people in the industry and secured more than 70 commercial ship orders annually. But, since the federal government pulled support in the 1980s, our shipbuilding production capacity has shrunk. The number of major commercial shipyards in the United States has fallen to just seven, and they produce 10 oceangoing vessels per year.
China, meanwhile, produces more than 10,000, and has orders that account for more than half of global production.
That’s not because of comparative advantage. It’s because China identified shipbuilding dominance as strategically important and for decades has committed massive support to reach that objective. By producing far more than its own market needs and exporting the rest, its state-backed companies command the global shipbuilding industry – making the U.S. dangerously reliant on them in turn. A functional shipbuilding industry, after all, is how you build and maintain a navy.
That’s what makes the SHIPS for America Act so important; it would be a major step in breaking this reliance. The SHIPS Act would:
. Establish a Maritime Security Trust Fund to reinvest duties and fees collected from the maritime industry into maritime security programs and maritime commerce infrastructure;
. Create an interagency Maritime Security Board, led by a Maritime Security Advisor, that would make whole-of-government strategic decisions for a national maritime strategy;
. Create a 25% investment tax credit for shipyard investments and create a Shipbuilding Financial Incentives program to support innovation in domestic shipbuilding and ship repair; and
. Support a Maritime Workforce Promotion and Recruitment Campaign for workforce incentives.
Losing shipbuilding greatly contributed to deindustrialization in this country. Think about all the economic activity shipbuilding generates. A single commercial ship can require 13,000 tons of structural steel, 60,000 gallons of paint, and 130 miles of electrical cable.
With American shipbuilding revitalized, all that can and should be made by America’s workers and American companies.
Tell your Members of Congress: Support the SHIPS for America Act. And bring this important industry back to the United States.