Unions Ask for Section 301 Investigation on Chinese Shipbuilding
Four unions, representing machinists, steelworkers, shipbuilders and electricians, plus the Maritime Trades Council division of the AFL-CIO, asked the Biden administration to open an investigation under Section 301 on China's practices in its port infrastructure/logistics and shipbuilding industries.
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U.S. Trade Representative Katherine Tai said these sectors are critical. "We have seen the PRC create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries, and critical minerals, harming American workers and businesses and creating real risks for our supply chains," she said, announcing her receipt of the March 12 petition. She said she and the administration as a whole "are fighting every day to put working families first, rebuild American manufacturing, and strengthen our supply chains.
"I look forward to reviewing this petition in detail."
The petition says China has promoted state-owned shipping and logistics companies, dominates the supply of port cranes, and promotes its logistics platform, LOGINK. The petition says: "According to one study, there is now some link to a Chinese company or financing at over 60 percent of the world’s major container ports. In addition, a Chinese state-owned company provides 70 percent of the world’s cargo cranes. This maritime and logistics infrastructure gives the Government of China access to large volumes of sensitive data regarding ship traffic, container contents, freight rates, and more."
According to Statista, China produced 37% of ships delivered in 2022; South Korea and Japan are the other dominant cargo shipbuilding powers. The U.S. shipbuilding industry is mostly military vessels. According to the U.S. Naval Institute, which says the U.S. should return to subsidizing shipbuilding, China has almost 47% of the global shipbuilding market, South Korea has 29%, Japan has 17 %, and the U.S. "has a relative insignificant capacity at 0.13%."
Senate Finance Committee Chairman Ron Wyden, D-Ore., responded to the petition by saying: "A healthy shipbuilding sector is essential to our national security, so the United States cannot afford to cede leadership and production capacity to China. I urge the Biden administration to carefully review the detailed allegations and consider remedies to address China’s unfair and discriminatory practices in the shipbuilding industry."
He said this should be the first of many Section 301 investigations into sectors China is trying to dominate through aggressive subsidies and control of inputs and technology needed in other countries' industries.
House Ways and Means Committee ranking member Rep. Richard Neal, D-Mass., said "the Biden Administration should launch an investigation and work to understand how China’s actions have negatively impacted our own maritime and commercial shipbuilding production, and what can be done to not only bring this industry home but also the jobs.
“Returning to our stature as maritime leaders is the logical next step in the wildly successful Investing in America agenda while also allowing us to act in the best interest of our national security."