How China Came to Dominate Global Shipbuilding

In partnership with

Read The Daily Upside. Stay Ahead of the Markets. Invest Smarter.

Most financial news is full of noise. The Daily Upside delivers real insights—clear, concise, and free. No clickbait, no fear-mongering. Just expert analysis that helps you make smarter investing decisions.

Join 1M+ readers today.

Your bike, your couch, your kids' toys — even your car — most likely crossed an ocean on a ship. And those ships, just like a lot of the stuff they're carrying, were very likely made in China.

China is by far the world’s largest shipbuilding nation. They have the steel, the aluminum, the parts, the components, and the final assembly. China owns that infrastructure.

Around 34% of all the ships currently on the water were made in China. At the same time, about 57.1% of ships currently under construction are being built in Chinese shipyards. China's share of global ship production grew from less than 5% in 1999 to over 50% in 2023.

Not only does China dominate in shipbuilding, but it also controls a huge part of the wider shipping ecosystem. Today, 95% of shipping container production is owned and operated by China. A single Chinese shipyard now produces more ships every year than all American shipyards combined.

It’s a business the U.S. once dominated. Donald Trump, having already started a trade war with China, has ideas about how to even the playing field. He’s promised to resurrect the American shipbuilding industry, including both commercial and military shipbuilding.

Trump is trying to reposition the U.S. in the world — with tariffs and other measures aimed at resetting the relationship with China. Such a reset could have far-reaching consequences, potentially changing the economics and landscape of global trade.

So, what’s behind this push to bring shipbuilding back to America — and is it even possible?

Once upon a time, the U.S. was the dominant force in shipbuilding. The high point came during World War II, when American shipyards built thousands of “Liberty” ships that helped keep the Allies supplied in the fight against Nazi Germany. This effort created a massive shipbuilding capacity in the U.S.

But the world changed. In the 80 years since WWII, U.S. shipbuilding declined. By the 1970s, Japan had taken the lead. By the 1980s, South Korea joined. And by the 2000s, China emerged. Today, those three countries dominate the entire global shipbuilding industry.

China gradually built its power in the shipbuilding sector, overtaking South Korea and Japan in recent years. After joining the WTO in the 2000s, China’s economy boomed, fueling demand for ships. In its 10th Five-Year Plan, the Chinese government outlined a vision to grow both its ports and its shipbuilding sector. This laid the foundation for a focused, coordinated effort involving manufacturers and labor to build a globally competitive industry.

China was already strong in heavy manufacturing — producing steel beams, bars, and similar materials. It has a robust export-oriented economy and a highly skilled, well-educated, and relatively low-cost labor force. These are the hands needed to build sophisticated ships.

The Chinese government supported shipbuilding as a strategic sector as part of its move from basic manufacturing to more advanced products. The combination of government support and initial infrastructure created a reinforcing cycle: the more ships they produced, the cheaper and more efficient production became.

In contrast, the U.S. has spent decades outsourcing manufacturing jobs. Like most developed economies, the U.S. is now primarily a service economy. Only about 8% of total employment in the U.S. is in manufacturing.

A China-built container ship costs about $55 million, while a comparable U.S.-built ship could cost around $330 million. That price difference explains the massive production gap between 2020 and 2022: China had over 4,000 large oceangoing ships on order, while the U.S. had just 12. In 2024, the U.S. built just 0.01% of the world’s commercial ships.

The Center for Strategic and International Studies reported that one Chinese state-owned shipbuilder built more commercial vessels by tonnage in a single year than the entire U.S. shipbuilding industry has built since WWII.

Shipbuilding is capital- and labor-intensive. It also requires a massive support infrastructure. To move into large-scale production of expensive, advanced ships, nations typically need to provide significant subsidies.

This is where China’s centralized government model thrives. Between 2010 and 2018, China’s government provided about $132 billion in support for shipbuilding. That figure doesn’t even include other forms of aid — like directing state-owned enterprises to offer low-interest loans, debt forgiveness, or equity infusions.

If the U.S. wants to compete, it would have to provide subsidies to make shipbuilding commercially viable again. This would mean funding an industry that won't be profitable and would cost taxpayers money.

Donald Trump proposes raising revenue for shipbuilding through new levies on Chinese-built, owned, or operated ships. The fees would start at $1 million per docking and could go up to $3.5 million or more every time a Chinese-built ship docks in the U.S. Additionally, shipowners with any Chinese-built ships in their fleet would also likely face these fees.

One industry expert called the proposal a "trade apocalypse." It could make American goods more expensive, drive up freight rates and inflation, and divert trade away from U.S. ports. Costs would rise across the board.

Extreme levies might cause ripple effects through U.S. supply chains. Ships would reorient their routes to avoid the U.S., making fewer stops. This could change how goods are distributed — with more reliance on road and rail instead of coastal shipping.

The Trump administration’s policy leans toward “America First” — a go-it-alone strategy. But going from limited shipbuilding capacity to full production of large container or cruise ships is a huge leap. A better policy might be to identify which parts of the shipbuilding supply chain the U.S. should focus on, and how to support manufacturers in transitioning into those roles.

The U.S. does have allies with strong shipbuilding capabilities — like South Korea and Japan — who could be part of the solution.

But the drive to restore American shipbuilding isn’t necessarily about profit. There are broader national security concerns over letting China dominate the maritime industry. This is a geopolitical issue: the U.S. views shipping as a key strategic resource and is trying to strengthen its influence over global trade routes.

From a security perspective, it's concerning that the U.S. cannot build its own ships and relies so heavily on Chinese-built vessels to move goods. Overlaying this is a new political argument about the importance of rebuilding heavy manufacturing in general — a cornerstone of Trump’s broader agenda.

The focus on shipbuilding might just be part of a wider geopolitical and economic strategy. These tariffs and charges are huge and need to be seen within the broader context of U.S. politics today.

Few believe there will be a full restoration of American shipyards. Countries like China, Japan, and South Korea are so dominant that a return to past glory seems unlikely.