By Lisa Baertlein and Andrea Shalal
LOS ANGELES/WASHINGTON (Reuters) -The U.S. plans to levy fees on imports arriving on Chinese-made ships and offer tax credits to resuscitate domestic shipbuilding and reduce China’s grip on the $150 billion global ocean shipping industry, a White House document seen by Reuters shows.
President Donald Trump is drafting an executive order that would also establish a Maritime Security Trust Fund as a dedicated funding source and create shipbuilding incentives through the use of tax credits, grants and loans, according to a draft fact sheet of the 18-point plan.
“The White House is standing up an office at the National Security Council to lead a whole-of-government effort to strengthen the maritime industrial base,” the document said, following Trump’s announcement of the plans during an address to Congress on Tuesday.
The Republican president’s initiative won rare praise from Jake Sullivan, national security adviser to former President Joe Biden, who said decades of unfair trade practices by China had negatively affected U.S. commercial and military shipbuilding.
“American shipbuilding is critical to protecting our national and economic security. Now is the time to act — to address the impact of China’s policies and to replenish American maritime capacity and power,” Sullivan told Reuters.
Republican and Democratic U.S. lawmakers for years have warned about China’s growing dominance on the seas and diminishing U.S. naval readiness. The pending executive order appears to be influenced by existing proposals, including legislation with bipartisan backing.
Trump’s initiative comes two months after the Biden administration concluded a nearly year-long probe requested by the United Steelworkers and other unions, which found that China uses unfair policies and practices to dominate the sector.
Michael Wessel, president of the Wessel Group, who helped coordinate that investigation under Section 301 of the Trade Act of 1974, said Trump’s announcement was an encouraging step forward after years of efforts by unions to revitalize the industry.
“We can still be the industrial leaders of the world – but only if we act,” he said, adding that a range of tools was needed, including investments, tax credits and efforts to strengthen both supply chains and the workforce.
Mike Waltz, Trump’s national security adviser and a former House Republican from Florida, last year introduced a bill with Democratic Senator Mark Kelly from Arizona to reinvigorate commercial and military shipbuilding in the United States.
The U.S. Trade Representative’s office last month proposed charging up to $1.5 million for Chinese-built vessels entering U.S. ports as part of its probe of China’s growing domination of the global shipbuilding, maritime and logistics sectors.
Trump on Tuesday hailed an unrelated deal led by U.S. firm BlackRock to buy most of the $22.8 billion ports business of Hong Kong conglomerate CK Hutchison.
The deal will give the U.S. consortium control of key Panama Canal ports amid White House calls to remove them from what it says is Chinese ownership.
“My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” Trump told the U.S. Congress.
That BlackRock announcement followed last month’s reintroduction of bipartisan legislation that would require the Secretary of State and the Secretary of Defense to develop a strategy to monitor China’s efforts to build, buy, or own strategic ports.
Other measures in the draft document would direct Elon Musk’s Department of Government Efficiency to review government procurement processes, including at the U.S. Navy, increase wages for nuclear shipyard workers and develop a security strategy for the Arctic.
(Reporting by Lisa Baertlein in Los Angeles and Andrea Shalal in Washington; Editing by Chizu Nomiyama, Alistair Bell and Jamie Freed)
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