U.S. pushback against China’s shipbuilding and shipping industry that started during the Biden Administration seems likely to continue under President Donald Trump, with unclear consequences.
While blacklisting and potential sanctions against Chinese firms can be politically popular in the U.S., analysts note that they may backfire and disadvantage U.S. industry.
Early in January, the U.S. Department of Defense “blacklisted” several companies for alleged ties to the Chinese military—including the shippers China Cosco and shipbuilders China State Shipbuilding Corp (CSSC), China Shipbuilding Trading Co (CSTC), and Guangzhou Wenchong Shipyard.
On Jan. 20, the day Trump was sworn in, the office of outgoing Trade Representative Katherine Tai released a report on China’s maritime, logistics, and shipbuilding industries, finding that the country’s “targeted dominance in these sectors is unreasonable and burdens or restricts U.S. commerce, and is therefore ‘actionable’ under Section 301,” meaning they are justification for imposing tariffs.
Tai’s office made it clear that it expected the Trump administration to make the final determination of what actions it would take. Trump’s pick to replace Tai as trade representative, Jamieson Greer, and new Secretary of State Marco Rubio are expected to pursue aggressive tactics against China in the shipbuilding sector.
Blacklisting
The Defense Department’s ”blacklisting” of firms is different from the severe restrictions placed on companies that violate sanctions, according to S&P global. But calling out companies for being out of favor with the U.S. government can disrupt business and harm a firm’s reputation, similar to the impacts faced by Chinese tech company Huawei, S&P said.
The shipper Cosco notes that its North American offices in Texas and California were not on the blacklist and claims “our ability to conduct business in the U.S. or its capacity to provide high-quality services will not be affected at all,” according to FreightWaves.
Still, the U.S. moves against shipbuilders could be a boon for South Korea, who lost their position as the number one global shipbuilder in 2021. In 2024 China controlled about 69% of the shipbuilding market, while South Korea dropped to an eight-year low of 18% of the market last year, according to Hellenic Shipping News.
“During a November 2024 call with South Korean President Yoon Suk Yeol, it was reported that President-Elect Trump indicated interest in enhanced bilateral efforts between South Korean and U.S. shipbuilders to improve processes and efficiencies,” according to Holland & Knight. “It is expected that these efforts will build upon recent growth of South Korean shipbuilders in the U.S. industry, such as the December 2024 acquisition of an East Coast shipyard, Philly Shipyard.”
Blacklist risks
While the blacklisting aims to curb China’s influence in shipbuilding and shipping, observers warn it could raise costs for U.S. companies. Analyst Ralph Leszczynski of shipping network Banchero Costa suggests that avoiding CSSC shipbuilding yards may drive US shipowners to bid for scarce South Korean slots, inflating shipbuilding costs, according to TradeWinds.
Depending how far measures against Chinese companies go, the impacts could negatively impact the U.S. economy, he says. For example, restrictions on using Chinese-built bulk carriers could push freight rates to $100,000–$200,000 per day, making US exports like soybeans less competitive compared to Brazilian alternatives.
“This would drive up inflation in the U.S. if only selected container ships are allowed to import containerized goods into the USA,” Leszczynski says.
