Trump to create office of shipbuilding, calls for tax incentives

President Donald Trump said Tuesday during his address to Congress that the White House will create an office of shipbuilding and plans to offer new tax incentives aimed at reinvigorating the U.S. shipbuilding industry.

“To boost our defense industrial base, we are also going to resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding,” Trump said during his speech. “And for that purpose, I am announcing tonight that we will create a new office of shipbuilding in the White House and offer special tax incentives to bring this industry home to America where it belongs.”

“We used it to make so many ships. We don’t make them anymore, very much, but we’re going to make them very fast, very soon. It will have a huge impact,” Trump said.

Trump’s plan to stimulate the U.S. shipbuilding industry comes amid China’s emergence as the world’s largest producer of container ships, which has spurred national security concerns in the event that the commercial shipbuilding industry is needed to support the Navy in a conflict with China.

TRUMP ADMIN COULD RAISE PORT FEES ON CHINESE SHIPS: WHO WILL IT IMPACT?

The Wall Street Journal reported Tuesday that the Trump administration is drafting an executive order that includes 18 measures aimed at supporting U.S. shipbuilders, including raising fees on Chinese-built ships and cranes that enter the country.

Other provisions include higher pay for workers at nuclear shipyards and a directive for the Elon Musk-led Department of Government Efficiency (DOGE) to review procurement processes for the Navy and other agencies, the Journal reported.

The Office of the U.S. Trade Representative (USTR) previously outlined a proposal that would impose fees of up to $1.5 million for all port calls made by a ship built in China – including those operated by companies based outside of China. The size of the fee would vary based on the percentage of Chinese-made ships in the shipping company’s fleet, regardless of whether the ship making the port call was made in China.

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It would also levy an extra fee of up to $1 million per port call on Chinese-owned shipping companies. Over time, the proposal would phase in an additional requirement that increasing U.S. exports be shipped on U.S.-flagged vessels run by American operators.

The Trump administration’s plans follow a move made by the Biden administration that determined China used unfair policies and practices to build its dominance of the global maritime, logistics and shipbuilding sectors.

The U.S. and other Western governments have criticized what they consider to be China’s aggressive industrial policies and over-production of commodities like steel, which helped galvanize bipartisan support for bolstering U.S. shipbuilding. The Chinese government has denied wrongdoing.

Reuters contributed to this report.