The USTR found that China’s shipbuilding dominance would hurt the US, according to Reuters

By Andrea Shallal and David Lauder

WASHINGTON (Reuters) – The Office of the U.S. Trade Representative said on Thursday that China’s targeted dominance in the global shipbuilding, maritime and logistics sectors was “unreasonable” and “implicit” under U.S. trade law.

The findings of the USTR investigation, first reported by Reuters on Tuesday, did not include specific proposals for sanctions against Beijing, leaving the next steps up to President-elect Donald Trump, who takes office on Monday.

The USTR said the report supports the determination that “China’s targeted dominance in the maritime, logistics, and shipbuilding sectors is unreasonable and burdens or restricts U.S. trade.”

The Chinese Embassy in Washington could not immediately be reached for comment on the investigation.

U.S. Trade Representative Catherine Tay launched the investigation in April 2024 at the request of the United Steelworkers and four other U.S. unions under Section 301 of the Trade Act of 1974. or “unreasonably” or burdens US commerce.

Section 301 is the legislation used by Trump and President Joe Biden to impose steep tariffs on Chinese imports starting in 2018.

In a statement given by Tai, the US commercial shipbuilding sector in 2010 China now builds 1,700 ships a year, down from 70 ships a year in 1975 to less than five.

“Beijing’s targeted hegemony in these sectors undermines fair, market-oriented competition, raises economic security risks, and is the biggest obstacle to revitalizing American industries and the communities that rely on them,” he said.

“These findings under Section 301 pave the way for urgent action to invest in America and strengthen our supply chains,” she said.

David McCall, president of United Steelworkers International, welcomed the report as a “strong and undeniable indictment” that required a swift and decisive response from the incoming administration, and signaled Trump’s willingness to hold China accountable.

There was no immediate comment from Trump’s transition team.

China’s efforts to control the shipbuilding, maritime and logistics sectors have been fueled by Beijing’s “extraordinary control” over enterprises in the sector and cut off business opportunities for market-focused companies, the report said. This will reduce competition and increase dependence on China.

Chinese sectors have benefited from China’s lack of effective labor rights, overcapacity in steel production and control over digital logistics services, the report said.

US Senator Mark Kelly said the report shows the importance of revitalizing America’s shipbuilding and maritime industries through legislation to achieve that.

“The PRC’s unfair trade practices are allowing China to dominate the oceans, harming American workers and our national security,” Kelly said in a statement to the People’s Republic of China.