U.S. Shipbuilding Plots the Path Ahead

The military and Coast Guard budgets are established that will benefit the U.S. ship building and repair sector, but what will stimulate the commercial yards?

This author has been scratching his head of late, after a thrilling dive into July’s U.S. Big Beautiful Bill Act, and has asked several colleagues where the funding for support commercial shipbuilding can be found? To answer that, we need to look elsewhere and to future programs.

Setting the Scene

Many column inches have been dedicated to the decline U.S. shipbuilding, whether signaled by the relatively small presence of a U.S. commercial fleet in international waters since the Civil War in the 1860s or the decline in yard capacity from after World War 2, where the Maritime Commission managed the delivery of ~5,800 mostly commercial ships and the navy 1,310 naval vessels between 1941-1945, reflecting America’s industrial prowess.

At the end of the 1930s, Great Britain, Central Europe and Scandinavian shipyards accounted for ~80% of all global deliveries (measured by compensated gross tonnes). The U.S. program during World War II replaced much of Britain’s lost capacity. After the war, British, western European and U.S. commercial yard capacity has reduced significantly, being replaced by the Japan, South Korea and increasingly China.

In 2024, China recorded a 54% shipyard market share (in output terms measured by compensated gross tonnes), South Korea 22%, Japan 12%, Europe 4% and 8% for a number of other countries, according to Clarksons Research.

Simply put, despite being a significant builder and repairer of naval vessels and Jones Act complaint vessels for the domestic market, the U.S. have been a minor player in the international commercial and specialist vessels shipbuilding market.

Restoring America’s Maritime Dominance

A key initiative of the current White House administration is the restoration of “America’s Maritime Dominance.

To support the initiative, the President Trump issued a key Executive Order in April 2025, demanding the creation of a maritime Action Plan (MAP) to revitalize U.S. maritime industries. Specific elements of the order include:

1. Directing the Department of Defense to invest in and develop the Maritime Industrial Base (MIB) – the Big Beautiful Bill Act has allocated ~$33 billion to shipbuilding programs and technology and supply chain development.
2. Instructing the United States Trade Representative (USTR) to recommend addressing China’s dominant shipbuilding position, following a public consultation on a range of issues including imposing fees “on every Chinese-built vessel that docks at a United States port.” This is probably the strongest lever to push companies to build vessels in the U.S.
3. Establishing the Maritime Security Trust Fund “to provide consistent funding for maritime programs in addition to a shipbuilding financial incentives program to boost private investment in U.S. shipbuilding.”
4. Increasing the fleet of commercial U.S. flag vessels trading internationally and domestically.
5. Reestablishing the presence of the U.S. in the arctic (through building icebreakers). The Big Beautiful Bill Act has allocated ~$8.6 billion for icebreakers out of a $18.6 billion Coast Guard allocation.
6. Investing $50 million of funding annually in 2026-2035 to expand the Maritime Innovation Program to support technology incubators and stakeholder partnerships focused on shipbuilding, alternative fuels, shoreside infrastructure, vessel design and naval architecture, and other areas identified as a priority by a Maritime Security Board.

Funding for some, but not all, of the above initiatives has been made available in the Big Beautiful Bill Act.

The initial importance of shipbuilding to the White House was reflected in the position of the National Security Council’s (NSC) Senior Director for the Office of Maritime and Industrial Capacity and NSC Chief of Staff in the White House. Under the Trump White House, this was the first time in recent administrations that the Office of Maritime and Industrial Capacity, supporting federal policy development and execution for shipbuilding, has been physically located at the White House. However, following the departure of some five out of seven senior staffers, it is understood that the shipbuilding activity will be moved out of the NSC to the Office of Management and Budget. It is unclear who is currently accountable for managing the development of the Executive Order. This reflects a potential loss of focus on commercial shipbuilding.

We look to the SHIPS Act for support for the commercial sector.