The US should “fight fire with fire” and impose fees on Chinese-built vessels to fund subsidies for its own shipbuilders, Donald Trump’s new appointment to head America’s maritime regulator has said.
“We need to offset the subsidies that China has given their shipbuilding industry, fight fire with fire,” Louis Sola, who was appointed chair of the Federal Maritime Commission (FMC) in January, told the Financial Times. “Where should that money [from fees on Chinese ships] go to? That money should be invested into American shipping.”
Sola’s comments follow a recommendation by the US Trade Representative (USTR) to impose measures including fees of up to $1.5mn on Chinese-built ships calling at US ports.
The Trump administration is expected to make a final decision on the proposal, made following an investigation begun under former president Joe Biden, after a public hearing in March.
As many as 36,595 US port calls in 2024 could have been affected by the USTR measures, which could generate annual fee income as high as $52bn, according to researchers at shipbroker Clarksons.
“I don’t want to take their Goliath and tie his legs together,” the FMC chair said. “I’d rather put my own champion out there against him and the only way you can do that is you have to fund them.”
The proposal to impose punitive measures on Chinese ships calling at US ports is the latest effort to boost American competitiveness, a key aim for Trump. The US president told a joint session of Congress this month he would create an “Office of Shipbuilding” in the White House along with tax incentives for the industry.
“To boost our defence industrial base, we are also going to resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding,” Trump told lawmakers.
US shipbuilders are highly unlikely to come close to competing with Chinese rivals in the near future, however, said experts.
Once one of the leading shipbuilding nations, as of March the US had secured just 0.2 per cent of the global commercial shipping order book in compensated gross tonnage, a measure of the work taken to build a ship. That compares with China’s 59 per cent, according to Clarksons Research.
The FMC, which regulates the global shipping industry to protect the interests of US consumers, was assisting the USTR with its investigation into Chinese shipping ahead of the public hearing on the fee proposal, Sola said. The probe was initiated last year in response to US labour unions calling for an investigation.
Sola argued that although the US had turned to cheaper subsidised manufacturing from Asia, the country “has the resources, it has the facilities, it has the people, and it has the knowhow”.
He said the US could “take a major percentage” of production for the cranes that load and unload ships at port, for which the “technology is not that complicated”.
The widespread presence of Chinese-built cranes at US ports has been scrutinised by US authorities since the Biden administration, amid concerns they could be controlled remotely.
Sola acknowledged that shipbuilding was a “much more complex animal” but argued that the US “could be a player on some of the smaller commercial vessels”.
The FMC, whose lawyers and economists advise the government on legislation, is a politically independent government agency. But Sola, an FMC commissioner since 2019 who has run for congress as a Republican candidate, has previously publicly supported Trump.
Sola said that “with President Trump’s America First priorities, [the FMC was] kind of foremost up there”, adding that he was seeking a bigger budget so the agency could hire more staff, despite the administration making swingeing cuts to other government agencies.
“Rather than being for the arts or radio or something like this, it’s real easy to see and touch what the FMC does,” Sola said. He said he wanted to boost headcount by 30 per cent, and that the FMC had been seeking to accelerate the hiring process for the best candidates from a limited pool of US maritime experts.
The FMC is a relatively small US agency, but its caseload has already increased on the back of increasing concerns over America’s reliance on foreign shipowners.
Announcing the passing of legislation that expanded the FMC’s powers to investigate and fine shipowners in 2022, Biden blamed “foreign-owned carriers” for price increases that “hurt American families” during the Covid-19 pandemic.
Peter Sand, chief analyst at shipping market tracker Xeneta, warned that the fees on Chinese shipping tabled by USTR “could cause major congestion and delays in the US”.
The proposal comes as new tariffs imposed by the Trump administration, including on steel and aluminium, and further levies he has threatened are expected to increase import costs.
“The threat of even higher costs to import goods into the US should be taken very seriously,” Sand said.
Additional reporting by Demetri Sevastopulo
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