Trump’s Shipbuilding Revival Plan Could Disrupt Global Shipping, Industry Warns

President Donald Trump’s ambitious proposal to rejuvenate the U.S. shipbuilding industry has sparked alarm among global ocean carriers, who warn that the plan could introduce hefty costs, destabilize supply chains, and create unintended disruptions in international trade.

According to a draft executive order reviewed by Worldcraft Logistics, the Trump administration intends to fund domestic shipbuilding through substantial levies on foreign-built vessels, particularly those constructed in China. These fees would not only target Chinese-owned ships but also penalize shipping companies operating vessels manufactured in China, regardless of ownership.

Industry leaders argue that the sweeping measures could have far-reaching consequences. The World Shipping Council (WSC), which represents major global liner shipping companies, estimates that these tariffs could impose up to $30 billion in additional costs annually on American consumers and potentially double the cost of shipping U.S. exports.

“Policymakers must reconsider these damaging proposals and seek alternative solutions that support American industries,” said Joe Kramek, CEO of the WSC, emphasizing the need for a balanced approach that does not inadvertently harm the broader economy.

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Unintended Consequences: Higher Costs, Supply Chain Disruptions

While Trump’s plan aims to revitalize the struggling U.S. shipbuilding sector and curb China’s influence in global shipping, industry executives caution that the policy could have unintended economic and logistical consequences.

Jeremy Nixon, CEO of Ocean Network Express (ONE), called the plan a “curve ball” that could severely impact ocean carriers and their customers. Speaking at the S&P Global TPM container shipping conference in Long Beach, California, Nixon warned that the financial strain from these tariffs could force shipowners to reduce the number of U.S. port calls, potentially congesting major hubs while leaving smaller ports struggling for business.

“In the short term, companies may have no choice but to adjust their vessel deployment strategies, which could lead to bottlenecks at some ports and reduced access to others,” Nixon explained.

MSC, the world’s largest container carrier, has already indicated that it may bypass smaller U.S. ports like Oakland, California - a crucial export hub for commodities such as fresh beef, dairy, and almonds-if the tariffs are implemented. Soren Toft, MSC’s CEO, warned that diverting ships from these ports could overwhelm major gateways like Los Angeles, Long Beach, and New York, reminiscent of the severe congestion that plagued global supply chains during the COVID-19 pandemic.

Beth Rooney, director of the Port Authority of New York and New Jersey, echoed similar concerns:

“It would be very difficult for us and our partners to absorb a sudden surge in volume if carriers shift their operations in response to these new policies.”

Repositioning Global Fleets: A Costly and Complex Task

Another major challenge stems from the reallocation of global shipping fleets. Industry experts point out that reassigning non-Chinese-built vessels to U.S. routes is neither simple nor cost-effective.

“If these regulations move forward, carriers will need to reshuffle their fleets at significant expense, potentially increasing transit times, reducing efficiency, and further escalating costs for businesses and consumers,” said an executive from a leading European shipping company.

Some companies, such as CMA CGM, which operates in partnership with China’s COSCO Shipping, are already exploring ways to expand their U.S.-flagged fleet. CEO Rodolphe Saadé confirmed that the company is in talks with U.S. shipyards to assess the feasibility and cost of building vessels domestically.

Meanwhile, Danish shipping giant Maersk has taken a more cautious stance, stating that it is too early to predict the impact of these potential tariffs given the evolving nature of the discussions.

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Retrospective Penalties: A Major Concern for Carriers

One of the most contentious aspects of Trump’s proposal is its retroactive penalties on past investments. Shipping companies that unknowingly invested in China-built ships years ago could now face financial punishment for decisions made before such policies were even under consideration.

“If a regulation is coming, let’s at least make it forward-looking and not penalize us for choices we made in the past-choices that were completely legal and reasonable at the time,” said MSC’s Toft.

Worldcraft Logistics Expert’s Insight

As a leading third-party logistics (3PL) provider, Worldcraft Logistics closely monitors regulatory changes that could impact global shipping and supply chains. A senior logistics expert at the company weighed in on the potential ramifications of Trump’s shipbuilding plan:

“While revitalizing the U.S. shipbuilding industry is a noble goal, policymakers must consider the ripple effects on logistics, trade efficiency, and consumer costs. Sudden changes in tariffs or fees could lead to cargo rerouting, increased transit times, and higher operational expenses, all of which could strain businesses and disrupt supply chains.”

From a logistics standpoint, the expert highlighted concerns over port congestion, particularly if carriers concentrate their operations at major ports while bypassing smaller, regional gateways.

“If fewer carriers call at secondary ports, exporters who rely on those hubs-such as agricultural producers-could face delays and higher costs, ultimately impacting international competitiveness.”

Conclusion

Trump’s shipbuilding revival plan underscores a broader geopolitical push to reduce reliance on China and strengthen domestic industries, but the proposed tariffs could introduce unforeseen complications for the U.S. and global economy.

While American shipbuilding could benefit, the potential for higher costs, logistical challenges, and supply chain instability raises questions about the long-term feasibility of such an approach.

Industry leaders and logistics experts continue to urge the administration to explore alternative solutions-ones that promote U.S. shipbuilding without imposing excessive burdens on businesses, ports, and consumers.