U.S. 301 investigation can't revive its shipbuilding-related industries

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Again, Washington, in an attempt to revive its domestic economy, has resorted to the Beijing-blame game.

This time it's against China's shipbuilding-related industries.

The U.S. announced the launch of a Section 301 investigation into China's maritime, logistics and shipbuilding sectors on Wednesday."The Biden-Harris administration recognizes growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition," according to the fact sheet Washington released on April 17.

Under the banner of "fair competition," Washington is taking unfair measures against China's industries. The White House is straightforward about the purpose of the investigation, namely, to "support American steel manufacturing and shipbuilding." But the Biden administration has failed to understand that punishing China cannot revive American industries.

To begin with, the competitiveness of China's shipbuilding-related industries is the result of technological innovation, not subsidies as some Westerners hype. China's continuous inputs in innovation have made manufacturing breakthroughs possible. It is worth noting that the country's first domestically built large cruise ship – Adora Magic City – embarked on its maiden commercial voyage on January 1, 2024. Without advanced technology, the Adora Magic City would not become a reality.

China's innovation-driven competitiveness puts it in the leading position in the global market. According to official statistics, completions, new orders received and backlog of orders – three key indicators of China's shipbuilding industry – accounted for 50.2 percent, 66.6 percent and 55 percent respectively of the global total in terms of deadweight tons in 2023. Five of the top 10 shipbuilding firms with the most shipbuilding completions are from China.

In contrast, the U.S. has seen its shipbuilding industry shrinking in recent years. While the American shipbuilding industry ranked first in terms of global capacity in 1975, the country now produces less than 1 percent of the world's commercial vessels, according to Financial Times reports.

This, apparently, has raised the anxiety level of some Americans. Accusing China of "unfair" trade practices, Washington's investigation lacks factual basis and is, in essence, an attempt to contain potential rivals against American firms.

To revive its domestic shipbuilding industry, the U.S., instead of containing others, should at least do more homework on reasons behind the shrinkage. "Much of the raw materials and components needed to produce new ships are no longer available in the U.S., thanks to the shrinking and outsourcing of the American manufacturing base," the Financial Times said in an opinion column. Lowered investments in technology, factory equipment and training for American workers are also believed to be factors that have led to an overall decline in competitiveness and capacity of the U.S. shipbuilding industry.

"If we could run capacity for more ships and the infrastructure to support them, it would create many more jobs which in turn would create more profitable facilities," the Financial Times quoted United Steelworkers' President David McCall as saying.

Instead of taking unfair measures against its rivals, the U.S. should put more effort into innovation, infrastructure and talent training if it is sincere in wishing to revive its shipbuilding-related industries. Washington's unfair investigation will only harm its ties with the world's second largest economy and trigger countermeasures from the Chinese government. This would bring the U.S. no good.

The previous U.S. administration, by launching a Section 301 investigation against China, already made a mistake, as the World Trade Organization (WTO) has already determined that the move violated WTO rules. With the clock ticking toward the general election, the Biden administration should think twice before making yet another one.

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