WATCH: Casey, Baldwin, Steelworkers host press conference on American shipbuilding and China’s anti-competitive behavior
Washington, D.C. – Senators Bob Casey (D-PA) and Tammy Baldwin (D-WI) joined the United Steelworkers (USW) and other unions to call on the Biden Administration to launch an investigation into the unfair trade practices of the People’s Republic of China (PRC) in the commercial shipbuilding industry that undermine American workers and jeopardize our national security.
“On a level playing field, American workers can out-compete anyone. That’s why Senator Baldwin and I are leading the effort in Congress to push the Biden Administration to investigate and impose tariffs on the Chinese Communist Party’s shipbuilding industry,” said Senator Casey. “To protect the American steel industry, our workers, and our jobs, we’ve got to crack down and hold China accountable.”
“When we make things in America, we build strong supply chains, create good-paying jobs, and can keep our country safe. Over the last two decades, China has tried to rig the system with unfair trade practices in the shipbuilding industry – hurting American workers, American shipbuilders, and our national security,” said Senator Baldwin. “Today, we’re standing with American workers and calling on the Biden Administration to quickly investigate China’s anti-competitive practices and help level the playing field.”
On Tuesday, USW filed a petition under Section 301 of the Trade Act of 1974 to call on United States Trade Representative (USTR) Katherine Tai to initiate a full investigation into the PRC’s unfair trade practices in the maritime, logistics, and shipbuilding sectors. Senators Casey and Baldwin joined USW and other labor leaders in support of the petition for a press conference and also sent a letter to Trade Representative Tai to conduct a full investigation.
Over the last 20 years, the United States has lost industrial shipbuilding capacity as a result of China’s increasingly aggressive subsidization of their shipbuilding. Chinese state-owned enterprises and other facilities in China are now capable of producing over 1,000 ocean-going vessels a year, while the United States currently produces fewer than ten. While shipbuilding capacity, suppliers, and shipyards remain vital to the U.S. economy and national security, uncompetitive trade practices have led to 25,000 domestic shipbuilding suppliers leaving the U.S. market over the past 20 years.
“Our union was proud to work with the Biden administration and congressional allies like Sens. Bob Casey and Tammy Baldwin to pass historic legislation revitalizing our infrastructure, rebuilding our supply chains and ramping up domestic manufacturing capacity,” said United Steelworkers (USW) International President David McCall. “Now we have the opportunity to capitalize on this momentum by turning our attention to the commercial shipbuilding industry. Reviving our nation’s shipbuilding capacity will make our country safer and secure while creating good, community-sustaining jobs.”
Senator Casey is a staunch supporter of Buy America standards, as well as legislation to develop American manufacturing capacity. In November, he sent a letter to President Biden sharing their serious concerns about potential reductions of Section 232 and 301 tariffs previously imposed on China on national security grounds. That month, he also voted against a resolution to effectively remove Buy American standards for electric vehicle (EV) chargers and force the United States to continue relying on China for products critical to the next generation of clean vehicle infrastructure. He fought to pass the Build America, Buy America Act as a part of the Infrastructure Investment and Jobs Act, which requires that all of the iron, steel, manufactured products, and construction materials used in infrastructure projects are produced in the United States. Casey also fought to pass the Inflation Reduction Act, which included tax credits for individuals and companies manufacturing or deploying clean energy technologies to help lower costs and secure our energy independence, as well as his provision to provide a “domestic content” bonus credit for companies that use American steel, iron, and manufactured goods.
The letter Senators Casey and Baldwin sent to the Biden Administration in support of USW’s petition is available HERE and below:
The Honorable Katherine Tai
600 17th Street NW
Washington, D.C. 20508
Dear Ambassador Tai,
We write to express support for the petition filed by the United Steelworkers (USW) under Section 301 of the Trade Act of 1974. We ask that you review the petition and initiate a full investigation into the actions of the People’s Republic of China (PRC) in the maritime, logistics, and shipbuilding sector.
Shipbuilding has a long and proud history in the United States. After World War II, the U.S. led the world in commercial shipbuilding. Today, our nation produces fewer than one percent of the world’s commercial vessels. While several factors have led to the domestic industry’s decline, unfair trade practices by the PRC—now the global leader in shipbuilding—have been a leading contributor to the decimation of America’s commercial shipbuilding capacity and the workers it employed. For just over two decades, the PRC has led a campaign of anti-competitive practices to dominate the global transportation supply chain. The PRC’s subsidization and industrial targeting strategies have come at the expense of American shipbuilders and shipyards, as well as American manufacturers of shipbuilding equipment and materials and their workers.
According to USW’s petition, over the last 20 years, the United States has lost industrial capacity to produce commercial vessels and equipment at a rate that was accelerated because of the PRC’s subsidized shipbuilding growth and other anti-competitive practices. Chinese state-owned enterprises and other facilities in the PRC are now capable of producing over 1,000 ocean-going vessels a year, while the United States currently produces fewer than ten. Anti-competitive, discriminatory and injurious practices by the PRC have also led to the loss of export market share of goods in the shipbuilding industry. For example, the U.S. used to export tens of millions of dollars’ worth of diesel or semi-diesel marine engines to the PRC, peaking at more than 1,500 engines a year in 2007 and 2008. Exports have fallen as a result of China’s unfair trade practices and U.S. manufacturers have exported fewer than 100 marine engines in the last few years.
In addition to our concerns for the domestic shipbuilding industry and U.S. jobs, we are troubled by U.S. economic and national security implications of China’s unfair trade practices. Commercial shipbuilding suppliers and shipyards are vital to the U.S. economy and national security. Privately-owned shipyards, alongside thousands of suppliers, provide critical industrial capacity for building the Navy’s fleet. The Department of Defense has made clear the need to grow the shipbuilding industrial base in light of the astonishing 25,000 domestic shipbuilding suppliers that have left the market over the past 20 years. The Navy’s shipbuilding plan for Fiscal Year 2023 states that “sustaining and growing this vital shipbuilding base is a national security imperative that both energizes and challenges the Navy and the Nation.” Indeed, in 2022 former Chief of Naval Operations, Admiral Gilday, referenced industrial capacity as one of the most significant constraints to achieving the Navy’s desired number of ships.
Our renewed awareness about supply chain fragility demands that we strengthen our domestic shipbuilding and supply capabilities to protect American interests. The loss of commercial market share for domestic shipbuilding suppliers has meant that the Navy and Department of Defense have budgeted over a billion dollars to address capacity and workforce risks at key upstream suppliers. The petition further highlights the dire situation if a conflict or national emergency results in damage or loss of existing merchant marine and U.S. military vessels. Currently, U.S. shipyards and suppliers do not have the capability to replace ships lost in combat or the ability to supply our own needs, much less our friends and allies. By supporting a vibrant, domestic commercial shipbuilding industry, we can ensure that there is sufficient capacity to scale up in times of need.
Moreover, the petition raises significant security implications of PRC-based firms that control shipping companies, strategic ports, and logistics platforms. For example, the government- controlled LOGINK logistics platform collects and combines data from a variety of government and private sector sources to create significant concentrated knowledge of the inflows and outflows of goods from ports across the world. The data collected gives the PRC access to sensitive information, such as the movement of military equipment through commercial ports.
In closing, we urge you to expeditiously initiate a full Section 301 investigation and consider the relief measures identified in the petition to address the injury that the PRC’s policies and actions have had on our commercial shipbuilding, transportation, and logistics sector. We appreciate your attention to this matter.
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