December 23, 2024 | Source: Logistics Baba
On December 19, U.S. lawmakers introduced the SHIPS for America Act, requiring that starting in 2029, 10% of goods imported from China must be transported by American-flagged vessels.
Section 415 of the bill mandates that within 15 years of the law’s enactment, the proportion of Chinese goods shipped to the U.S. via U.S.-owned vessels will gradually increase to 10%. These vessels must be built in the U.S., registered in the U.S., and crewed by American workers.
The bill also proposes establishing a trust fund, subsidies, and tax incentives to support the operation and development of U.S.-flagged ships, aiming to encourage more American importers to choose U.S. vessels for shipping.
Several maritime organizations have voiced support for the bill, including the Shipbuilders Council of America, the American Shipbuilding Suppliers Association, and the American Association of Port Authorities.
Key Provisions of the Bill Include:
- Shipbuilding Financial Incentives: Offering financial incentives to promote U.S. shipbuilding.
- Small Shipyard Grants: Providing funding to smaller shipyards.
- Port Infrastructure Development: Supporting the growth of port infrastructure.
- Educational and Training Support: Offering tuition discounts, scholarships, and special enrollment programs for veterans to develop maritime talent.
- Tax and Tariff Benefits for U.S. Shipping Companies: Offering tax breaks, modified import duties, and maritime privileges for companies choosing U.S.-flagged vessels for commercial cargo.
Background of the Bill
The bill was introduced following concerns over the decline of the U.S. shipping and shipbuilding industries. On September 25, 2024, U.S. Congressmen Mike Waltz and Senator Mark Kelly announced the bill, citing the shrinking American merchant fleet. During WWII, the U.S. had 10,000 merchant ships flying the American flag, manned by U.S. crews. Today, that number has dwindled to about 80.
In contrast, China’s shipbuilding industry has rapidly expanded and now leads the world, capturing a significant share of global orders. According to recent data, China’s shipbuilding output and order volume have grown significantly, dominating the global market.
Waltz has highlighted the U.S.-China shipbuilding gap, pointing out that China received orders for over 1,500 ships last year, while the U.S. only received 5. This disparity has prompted U.S. policymakers and industry leaders to seek legislation to revitalize the country’s maritime sector.
China Top Forwarder Co., Ltd Disclaimer: This article is reprinted for informational purposes. If any source attribution is incorrect or violates your rights, please contact us with proof of ownership for prompt correction or removal.