The commercial shipbuilding industry plays an outsize role in the economic and national security of the United States. American ships transport the goods on which Americans rely, and in a time of conflict, they can backstop the military’s needs as well. In addition, the industry’s vast supply chain requirements mean that a robust domestic shipbuilding program has the potential to support industrial growth across a range of sectors, including in places far afield from coastal shipyards.
Stakeholders and policymakers across the ideological spectrum have recently called for investment in shipbuilding, providing a rare opportunity for bipartisan policy solutions in Washington.1 But supporting shipbuilding and doing it well are two different things. The latter requires sustained public investment to rebuild the capacity of American shipyards, guaranteed demand, and cooperation with the private sector to support ship construction and provide meaningful benefits for workers and their families.
The goal should be to create and sustain a more robust domestic shipbuilding industry, not just to penalize Chinese-made ships. Rather, the United States should invest in and sustain a world-class commercial shipbuilding industry that can support American economic might and provide good-paying jobs in communities across the country. That will take far more than the tax incentives, tariffs, and fees that the Trump administration has so far proposed.2
The U.S. shipbuilding industry is in crisis
The shipbuilding capacity of the United States has declined to what the U.S. Naval Institute has deemed emergency levels and is in need of significant expansion in order to meet the country’s naval needs, as well as to outfit a modern merchant marine capable of supporting a robust economic resilience agenda.3 From 2020 through 2022, China consistently built more than 1,200 commercial ships per year, while the United States built fewer than six annually.4 China alone produces half of the world’s merchant shipping tonnage, but other countries also greatly outpace the United States’ ability to produce ocean-faring vessels.5 For example, South Korea and Japan produced the second- and third-most ships in 2023, with 28 percent and 15 percent of the global share, respectively.6 The United States, which contributed only 0.1 percent of global shipping tonnage, was bested by 13 other countries.7
The result is that the United States is beholden to China for much of its international shipping needs—and is beholden to a dozen other countries for the shipping that China does not provide. In fact, less than 2 percent of all U.S. waterborne imports and exports are carried on ships registered in the United States, meaning that a foreign jurisdiction manages the technical, social, and administrative affairs of the vast majority of ships that service the United States.8 The Trump administration acknowledged many of these shortcomings in a recent executive order calling for the revitalization of U.S. shipbuilding, as have both Democratic and Republican lawmakers.9
The United States must make consistent large-scale investments in its domestic shipbuilding capacity to reorient an industry that has moved away from the country for decades.
On the last day of the Biden administration, U.S. trade representative Katherine Tai concluded an investigation requested by the United Steelworkers to review China’s state-sponsored shipbuilding program.10 In its report, the U.S. Office of Trade Representatives (USTR) stated, “Beijing’s targeted dominance of these sectors undermines fair, market-oriented competition, increases economic security risks, and is the greatest barrier to revitalization of U.S. industries.”11
The Trump administration has adopted several policy positions outlined in the Biden administration’s report, although not always in the same manner.12 On April 17, 2025, the Trump administration announced fee levies per voyage, as opposed to per port entry. According to the USTR, the fees will amount to $140 per net ton for Chinese vessel operators and $33 per net ton for vessel operators of Chinese-built ships by 2028.13 The levy will be applied five times per year, at most, and is not applicable to vessels arriving to the United States to carry bulk exports or vessels carrying goods between American ports.14
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Fees alone cannot reorient the global shipbuilding industry
The approach that the Trump administration’s USTR has put forward will likely be insufficient. Its focus on using trade remedies, however innovative, is designed to limit only the presence of Chinese-built ships in American ports, not to address the fact that 12 other countries also produce more commercial ships than the United States.15 If the United States wants a robust shipbuilding industry—and it should, from both an economic and a national security perspective—it must do more than single out Chinese ships for additional tariffs or fees. Trade remedies will simply not be enough; nor will targeting only China’s market dominance. The United States must make consistent large-scale investments in its domestic shipbuilding capacity to reorient an industry that has moved away from the country for decades.16
There is, fortunately, an example worth emulating from the last time the United States needed to dramatically scale its shipbuilding capacity. The Liberty Ship program that the federal government managed during World War II was wildly successful.17 It completely remade U.S. shipbuilding in just a few years by not only focusing on establishing reliable demand for ships but also investing in both the U.S. industrial capacity to produce ships and the workers who made them.
![10,000-ton Liberty Ship vessels are shown near completion at the California Shipbuilding Corporation in Los Angeles.]()
Indicative of the then-growing strength of the American Merchant Marine, 10,000-ton Liberty Ship vessels are shown near completion at the California Shipbuilding Corporation in Los Angeles on December 22, 1941. (Getty/Bettmann)
The Liberty Ship program
On July 14, 1941, just six months after President Franklin D. Roosevelt delivered his “Arsenal of Democracy” speech,18 Congress granted the U.S. Maritime Commission the authority to manage ship construction. The legislation provided for investment of federal funds in the modernization of existing shipyards and the construction of new ones, filling a hazardous gap in U.S. naval capacity. At the time, 90 percent of vessels in the American Merchant Marine were more than 20 years old. Vice Admiral Adolphus Andrews, a decorated officer in the U.S. Navy, described the Navy’s equipment as inadequate, antiquated, and deficient—a lot like how a U.S. Government Accountability Office report describes the current state of naval shipyard capability.19
The goal of the Liberty Ship program therefore was to dramatically increase the number of ships produced in the United States for the merchant marine and the U.S. Navy. In total, 18 new shipyards across the country were outfitted with new capacity paid for by the federal government;20 by comparison, the United States operates just four public shipyards today.21 The government then leased use of the shipyards to private companies, which were responsible for constructing ships to a specific government-provided design.22
At the program’s peak in 1943, Liberty ships were built in just 30 days, by private contractors at facilities created or upgraded with taxpayer dollars.23 In some cases—almost unfathomably—construction of a new seagoing ship took only 4 1/2 days.24 Today it takes the world’s most advanced shipyards one to three years to produce a seafaring vessel.25 A world-class carrier, such as the USS Gerald R. Ford, launched in 2017,26 can take the better part of a decade to complete, not including the years needed for design and procurement.27
It should be noted, however, that modern ships are far more complicated than Liberty ships. The latter were not advanced; they were designed for simplicity and made to be produced quickly. Yet their contribution to the fleet was significant. Liberty ships transported a wide assortment of wartime supplies across the Atlantic and Pacific oceans, including ammunition, tanks, planes, food, and troops.28 In total, the program produced 2,710 ships between 1941 and 1945, supporting the shipment of more than two-thirds of material leaving the United States during the war.29 After the war, many Liberty ships were converted to merchant ships and continued to be used in civilian and military efforts.30
Why the Liberty Ship program was so successful
The Liberty Ship program owed its success to several factors.
First, by using public funding to outfit shipbuilding facilities, and then leasing them to private firms, the government assumed the cost and risk associated with upfront expenses, which can be significant in heavy industries such as shipbuilding. The companies that agreed to lease the production facilities were responsible for hiring employees and managing construction processes. When a ship was finished, it was guaranteed to be immediately purchased by the government at a set price and put into service.31
In other words, the government used its resources to buy down the risk associated with both supply and demand, allowing private companies to focus exclusively on efficiency and production. Today, most government support for industrial development is focused on one or the other, but rarely both. One recent exception is Operation Warp Speed, the program that helped to develop and distribute the COVID-19 vaccine.32 Operation Warp Speed demonstrated what is possible when the government actively supports all phases of a product’s development, production, and eventual deployment.
Yet procurement, while certainly helpful in ensuring demand for a product once it is commercialized, still requires domestic producers to cover the upfront costs associated with setting up a facility to mass-produce a product, which, in the case of shipbuilding and other large industrial enterprises, can be significant. And federal support for creating new supply of technologies often takes the form of tax incentives to encourage production; while these are helpful, they do not provide the immediate injection of new resources required to rapidly scale a new production capability.33
Second, despite the existential threat of World War II, the Liberty Ship program invested in workers, recognized their collective bargaining rights, and paid a fair wage.34 Working at a shipbuilding facility constructing Liberty ships was a good-paying job that supported not only the warmaking needs of the country but also the economic needs of workers and their families. The program employed 1.8 million Americans in unionized jobs between 1941 and 1945.35 Members of the merchant marine earned more than Army privates and had average monthly salaries that were competitive with those of other civilian employees.36
Third, at a time of very low unemployment because of the ongoing war economy, workers received substantial health benefits, child care, and affordable housing as a way to attract them to shipbuilding jobs.37 Henry J. Kaiser, the owner of several Liberty Ship shipyards, was one of the first U.S. employers to provide health insurance to his employees. Kaiser’s “pre-paid medical plan” helped his firms compete for workers in an era of wartime wage controls and was an early example of the employer-sponsored insurance model ubiquitous in the U.S. health care system today.38 After the war, Kaiser’s medical plans became Kaiser Permanente insurance. Kaiser also offered child care services and housing to his employees worth $40 per month, which was significant considering that median rent in 1940 was $27.39 Any new efforts to bolster U.S. ship manufacturing should follow the example of the Liberty Ship program and invest in care for workers.
Fourth, because many shipyard workers did not have prior experience building ships, the Liberty Ship program implemented a large, coordinated workforce training program to help workers and mariners develop skills such as welding, knotting, sailing, and first aid.40 A good shipbuilding program today should have a similar philosophy, understanding that workforce training is about positioning workers for a successful career, not just performing a rote task. Finland, an Icebreaker Collaboration Effort (ICE) Pact partner of the United States, for example, offers a robust system of publicly funded workforce training to welders and other potential shipyard workers—in addition to workers in other specialties.41 By providing vocational education, labor market training, apprenticeships, and work placements, the system ensures that workers are equipped with the skills and knowledge required for jobs in the immediate term and that they can find future employment more easily.
Lastly, it should be remembered that the Liberty Ship program was implemented in close coordination with partners and allies. British shipbuilders were heavily involved in the design of Liberty ships, and ships produced in the United States were used to support the operations of several governments around the world.42 In today’s broadly interconnected economy, a similar commitment to cross-border collaboration is required to do shipbuilding well. On the other hand, a shipbuilding program that amplifies the Trump administration’s isolationist tendencies would miss out on the important benefits that resilient cross-border supply chains can provide, as well as potential export markets for U.S.-made ships.
Conclusion
The manufacturing landscape today is much different than that of 80 years ago. Many tasks previously performed by humans are now automated, and manufacturing processes are more sophisticated. The country’s unemployment levels are far lower than prior to World War II.43 And outcompeting others takes more than just dramatic increases in the speed of production.
In today’s global economy, it would be anachronistic to build simple commercial vessels designed for speed of production over capability or sustainability. Such a focus would limit the potential to use new ship designs or new production techniques to lower emissions or improve efficiency.44 Yet any major national effort to rebuild U.S. shipbuilding capacity would do well to take into account lessons from the past on the government’s role in supporting both the supply and demand side of the value chain, as well as provisions to support good pay, health coverage, child care, and workforce training.
The U.S. shipbuilding industry has dwindled significantly after decades of underinvestment, allowing China and several other countries to produce far more commercial vessels than the United States. But policymakers must do more than simply blame China for the lackluster state of U.S. shipbuilding. It would be regrettable if the current administration and its congressional allies missed out on the opportunity to do shipbuilding in an effective, bipartisan way, given the real benefits such a program could provide for the country’s long-term security and for American workers and their families.
The authors would like to thank Michael Macan, history librarian at the U.S. Naval Academy, for his assistance with accessing primary and secondary sources on the Liberty Ship program.