February 19, 2026 11:24AM # Maritime Action Plan Highlights Washington’s Misplaced Shipbuilding Obsession By [Colin Grabow](https://www.cato.org/people/colin-grabow) --- SHARE Listen to this article Generated with [ ElevenLabs](https://elevenlabs.io/) AI technology. Loading the [Elevenlabs Text to Speech](https://elevenlabs.io/text-to-speech) AudioNative Player... On the eve of President’s Day weekend, the Trump administration released its long-awaited [Maritime Action Plan](https://www.whitehouse.gov/maritimemight/) (MAP), billed as a sweeping blueprint for reversing decades of US maritime decline. One of its core goals: resuscitating a commercial shipbuilding industry that has fallen into a [near-total collapse](https://www.gao.gov/assets/gao-25-106286.pdf). To that end, the plan calls for a broad mix of subsidies, [new fees](https://x.com/scottlincicome/status/2023061591734772060), and mandates designed to coerce demand toward US shipyards. Such logic is neither new nor uncontested. In a [recent essay](https://cimsec.org/washingtons-misplaced-shipbuilding-obsession/) published by the Center for International Maritime Security, I examined similarly motivated legislative proposals now circulating in Washington and argued that they would impose substantial costs while failing to address the maritime challenges that actually matter. Many of those critiques apply equally to the MAP. **A Chasm of Competitiveness** The MAP declares that its objective is not merely to increase the number of ships built in the United States but to reconstitute an industrial base capable of “competitive international performance.” It further emphasizes the importance of constructing large, oceangoing commercial ships—the workhorses of global trade—rather than small craft or niche vessels. It’s a vision sharply at odds with economic reality. US shipyards charge [roughly five times](https://www.nytimes.com/2025/05/27/business/economy/trump-shipbuilding-china.html) prevailing global prices for large commercial ships. As a result, [few are built](https://www.cato.org/blog/protected-us-shipbuilding-continues-sink). [Only three](https://infogram.com/1pz296ggnjzqmpt2k0vky969z7u15d6legz) large oceangoing cargo ships have been delivered by US yards so far this decade (all for the protected domestic market where foreign-built vessels are prohibited by the [Jones Act](https://www.cato.org/project-jones-act-reform)). Closing the chasm of competitiveness with leading international shipyards to spark domestic production would require not incremental improvement but a transformation of costs, productivity, and industrial organization on a scale not seen in modern US shipbuilding history. I lay out some of the obstacles that must be overcome in my essay: > *First, American shipyards* [*struggle to find*](https://x.com/cpgrabow/status/2006009010772951199) *sufficient labor to meet their current output. Shipbuilding is labor-intensive and requires a stable, highly skilled workforce. Yet Philly Shipyard is* [*reportedly experiencing*](https://koreajoongangdaily.joins.com/news/2025-07-07/business/industry/Trumps-efforts-to-revive-US-shipbuilding-slowed-by-inconsistent-policies-leadership-gaps-funding-shortfalls/2345718) *annual turnover approaching 100 percent, coupled with persistent issues such as drug use. Other yards also* [*report labor difficulties*](https://x.com/cpgrabow/status/1942216057735053528) *(including* [*quality*](https://news.usni.org/2024/09/26/doj-notified-of-suspected-intentionally-faulty-welds-on-subs-aircraft-carriers-at-newport-news-shipbuilding) [*issues*](https://www.justice.gov/usao-edva/pr/former-nns-inspector-plead-guilty-falsely-certifying-welds-0)*), and worker challenges* [*have been blamed*](https://nationalsecurityjournal.org/the-u-s-navy-cant-build-a-navy-anymore/) *for contributing to the U.S. Navy’s ill-fated Constellation-class frigate program.* > > *Such issues are not limited to the graving docks and fabrication shops. Besides a dearth of production workers, there is also* [*a deficit*](https://www.workboat.com/the-us-needs-more-naval-architects) *of naval architects.…* > > *Second, U.S. shipbuilding facilities are antiquated. A June 2025 GAO \[Government Accountability Office\] report* [*found that*](https://x.com/cpgrabow/status/1942212192574542293) *most such infrastructure dates from World War Two, and observers have* [*repeatedly*](https://x.com/cpgrabow/status/1839374082145698193) [*characterized*](https://x.com/cpgrabow/status/1911765729223098570) [*U.S. shipyards*](https://x.com/cpgrabow/status/1982866339716051242) [*as* decades](https://www.cato.org/policy-analysis/rust-buckets-how-jones-act-undermines-us-shipbuilding-national-security#jones-act-national-security-asset-or-liability) [*behind*](https://x.com/cpgrabow/status/1990511071359348986) *their international counterparts in terms of technology. Such factors contribute to a yawning* [*productivity gap*](https://www.cato.org/policy-analysis/rust-buckets-how-jones-act-undermines-us-shipbuilding-national-security#jones-act-national-security-asset-or-liability) *and are unlikely to be quickly remedied. Notably, a Navy initiative launched in 2018 to modernize its own shipyards is envisioned as a* [*twenty-year project*](https://www.gao.gov/products/gao-22-105993)*.* > > *Third, U.S. shipyards face inflated input costs. American steel prices—kept artificially high through tariffs—are a* [*particular problem*](https://x.com/cpgrabow/status/1980632581805920320) [*for those*](https://x.com/cpgrabow/status/1949827152406343906) [*seeking to*](https://x.com/cpgrabow/status/1942215286062522832) [*construct ships*](https://x.com/cpgrabow/status/1960692338826657926) *competitively. The absence of a robust* [*network of domestic suppliers*](https://x.com/cpgrabow/status/1960358070334177756) *and a maritime* [*industrial ecosystem*](https://x.com/cpgrabow/status/1990430043185492216) *compounds matters.* > > *This list of challenges is not comprehensive. Others include the difficulty of* [*locating waterfront property*](https://csis-website-prod.s3.amazonaws.com/s3fs-public/2025-12/251216_Daniels_Naval_Shipbuilding.pdf?VersionId=M39F5951zELfazlxjIm7alGsIW2Sc6eK) *near major population centers that is suitable for major industrial facilities. Even if successfully identified,* [*political*](https://www.nytimes.com/2025/11/18/business/economy/suisun-city-makes-an-offer-to-california-forever.html) [*difficulties*](https://youtu.be/tyrMokVDSxI?si=gbSW32lz92qongv8&t=77) *may arise. The redevelopment of brownfield sites for shipbuilding involves* [*years of red tape*](https://youtu.be/6gNAii4CbqQ?si=2a_SCDsT4PEpNqV4&t=1231)*. Expanding capacity at existing shipyards can be nearly impossible due to* [*physical*](https://x.com/cpgrabow/status/1897319935501852826) [*constraints*](https://www.inquirer.com/business/hanwha-shipyard-navy-maintenance-contracts-20250424.html)*.* Competitively building large cargo ships under such constraints is a near-Herculean task. **Subsidies and Historical Experience** To overcome these challenges, the MAP offers a recipe of more subsidies, new fees on foreign-built ships, and a requirement that US-built vessels be used to transport some percentage of American imports. Implicit is that sufficiently generous or coercive policy can will a globally competitive shipbuilding industry into existence. But this is hardly a novel approach. The United States has been down the subsidy road before, and the results have not been impressive: > *Despite* [*some claims*](https://x.com/cpgrabow/status/1423344398121717768) *to the contrary, U.S. shipbuilding policy is already infused with government intervention. Congress guarantees U.S. shipyards a captive domestic market through the* [*Jones Act*](https://www.cato.org/project-jones-act-reform) *and related coastwise laws that ban foreign-built vessels from domestic commerce.* [*Federal tax*](https://www.maritime.dot.gov/grants/capital-construction-fund) [*benefits*](https://www.maritime.dot.gov/grants/construction-reserve-fund)*,* [*direct grants*](https://www.maritime.dot.gov/grants-finances/small-shipyard-grants)*, and* [*financing*](https://www.maritime.dot.gov/grants/title-xi/federal-ship-financing-program-title-xi) *are also employed to encourage domestic shipbuilding. State and local governments* [*offer*](https://www.workboat.com/viewpoints/chouest-corporate-welfare) [*further aid*](https://www.portofbrownsville.com/keppel-amfels-designated-texas-enterprise-zone/)*. Philly Shipyard alone has received* [*more than $400 million*](https://web.archive.org/web/20210227050702/https:/www.inquirer.com/philly/business/20101231_Without_financial_aid__Aker_Philadelphia_Shipyard_will_close_by_July.html) *in public support, in addition to its* [*$1‑per-year lease*](https://web.archive.org/web/20210227050702/https:/www.inquirer.com/philly/business/20101231_Without_financial_aid__Aker_Philadelphia_Shipyard_will_close_by_July.html)*.* > > *The most ambitious federal program was the 1936 introduction of “construction differential subsidies” that covered up to half the cost of U.S.-built ships. The purpose was explicit: Eliminate the price gap between domestic and foreign shipbuilding by covering up to 50 percent of the cost of domestically-built ships. But the measure failed to impel competitiveness, and storm clouds* [*were gathering*](https://drive.google.com/file/d/1UJwLSBXvXcNTMfApNGgJHJTSCD0qKh_w/view) [*around the*](https://drive.google.com/file/d/1JPhqUIvaXvo3Qm9yjeoybbGjGQ3YEttz/view) [*industry*](https://www.nytimes.com/1980/07/23/archives/us-shipyards-in-the-doldrums-orders-down-sharply-more-us-aid-asked.html) *even before the subsidies’ withdrawal in 1981. It is a testament to U.S. shipyards’ dependence on such funding that output of* [*15–20 ships per year*](https://www.cato.org/blog/subsidies-misplaced-shipbuilding-nostalgia) *under the subsidy regime fell to typically* [*low single digits*](https://infogram.com/1pz296ggnjzqmpt2k0vky969z7u15d6legz) *in the decades since it ceased.* > > *Subsidies and Jones Act-style requirements can temporarily stimulate production but create dangerous dependencies and incentive structures. There is little reason to believe they can close the structural cost gap or lead to the construction of internationally viable cargo ships. U.S. government interventions alone* [*will not*](https://x.com/cpgrabow/status/1778431713690955900) [*yield*](https://x.com/cpgrabow/status/1978085171250205106) *such competitive shipbuilding.* **Questionable Benefits** Even if the MAP’s industrial policy could somehow succeed in significantly increasing ship production, the payoff is far from clear. In making their case for the MAP, administration officials [argue that](https://www.foxnews.com/politics/trump-unveils-maritime-action-plan-china-dominates-global-shipbuilding) increased commercial shipbuilding would spill over into naval shipbuilding, resulting in lowered costs and improved delivery timelines. But such logic appears at odds with the realities of naval and commercial shipbuilding: > *Although commercial and naval shipbuilding share some commonalities, they also diverge in significant ways. As one paper* [*recently noted*](https://maritime.engin.umich.edu/wp-content/uploads/sites/697/2025/10/GLMI.A.Unified.Vision.Whitepaper.pdf)*, there are “major differences in materials, production complexity, regulations, and design philosophies.” In 2006 congressional testimony, the commander of Naval Sea Systems Command* [*stated that*](https://drive.google.com/file/d/1tKMm6T_8Ym1v2YSy6DYRJjmxmWhMHnDC/view) *“one could argue they are separate industries.”* > > *The fact that major naval shipyards—even with a captive domestic market—have largely abandoned commercial construction reinforces the point. Bath Iron Works, which builds destroyers, has not built a commercial ship* [*since 1984*](https://x.com/cpgrabow/status/1603798275412426752)*. Ingalls Shipbuilding, another warship builder, has not attempted commercial construction since an* [*ill-fated effort*](https://en.wikipedia.org/wiki/Project_America) *in 1999. Newport News Shipbuilding’s push to fill its orderbook in the post-Cold War 1990s with commercial tankers resulted in a loss of* [*over $320 million*](https://drive.google.com/file/d/1hcv0CknVNOmhuz2XMgGywKgb5MV73AeR/view)*.* > > [*Fincantieri Marine Group*](https://fincantierimarinegroup.com/about-us/)*, meanwhile, constructs surface combatants at its shipyard in Marinette, Wisconsin, and commercial vessels at a separate shipyard in Sturgeon Bay.* > > *This shipbuilding bifurcation isn’t uniquely American. Congressional Research Service \[CRS\] analyst Ronald O’Rourke* [*has noted*](https://x.com/cpgrabow/status/1774835889270563108) *that Asian yards engaged in both naval and commercial vessel construction make a concerted effort to separate workers by ship type. Japan’s Mitsubishi Heavy Industries* [*is said to*](https://www.usni.org/magazines/proceedings/2025/june/lessons-japan-and-south-koreas-submarine-builders) *physically and organizationally “air gap” its naval and commercial shipbuilding.* > > *A 2024 RAND Corporation* [*analysis*](https://www.rand.org/pubs/working_papers/WRA2852-1.html)*, meanwhile, found that the two types of shipbuilding may be growing increasingly independent in China, with shipyards “focusing either on naval or commercial shipbuilding, but not both.” Notably, South Korean shipbuilding firm Samsung Heavy Industries has eschewed the construction of naval combatants.* > > *To be sure, overlap between commercial and naval shipbuilding does exist, and a scenario can be imagined in which increased commercial output helps spread certain fixed costs and overhead across more vessels. But consider the logic. Spurring commercial shipbuilding via subsidies would mean spending significant sums in the hope of recouping them through new efficiencies—a highly uncertain proposition.* Beyond the questionable supposed dividends of this approach, there’s another point to consider: Not only could subsidized commercial shipbuilding fail to assist naval construction, it may also actually *harm* it: > *Perhaps of greater concern is the potential impact of subsidy-driven commercial shipbuilding on naval shipyards’ ability to attract workers. Given existing labor pool stresses, there is considerable apprehension that an increased demand for ships could lead to workers being siphoned from existing yards (notably, Philly Shipyard has* [*hired veterans*](https://www.inquirer.com/business/hanwha-shipyard-philadelphia-navy-building-20241220.html) *of Gulf Coast yards to meet their labor needs). Labor constraints could lead to lengthened timelines, inflated costs, and intensified bottlenecks at naval shipyards already struggling with delays and overruns.* > > *Such concerns are rooted in past experience. A* [*1975 GAO report*](https://www.gao.gov/assets/psad-75-44.pdf) *highlights Navy congressional testimony the previous year which stated that increased commercial shipbuilding—boosted by federal subsidies—had led to shortages of skilled labor, contributing to delivery delays and higher costs for Navy ships.* > > *In other words, subsidized construction of large commercial ships may actually* weaken *military shipbuilding. Similar logic applies to commercial shipbuilding, with workers and investment flowing to larger shipyards at the* [*expense of smaller ones*](https://youtu.be/SIhr_E788LY?si=0wkeyfidt1ETEFmE&t=1594) *that are better positioned to develop a comparative advantage in the international market. It is not apparent what problem faced by naval shipyards would be solved by either a general increase in commercial output or by adding commercial shipbuilding to naval yards that already struggle to deliver combatant ships on time.* Also deserving of scrutiny is the idea that reinvigorated US commercial shipbuilding would pay dividends in times of war. Unless one assumes a prolonged, industrial-scale conflict lasting many years, new commercial ship construction is unlikely to meaningfully affect wartime outcomes. And there are simpler ways to obtain merchant ships: > *Other arguments in favor of boosting cargo ship construction are similarly problematic. Notions that commercial shipyards could quickly expand the U.S. merchant fleet in wartime or replace losses, for example, are far from clear. Oceangoing ships cannot be* [*quickly*](https://x.com/cpgrabow/status/1745154346805780863) [*conjured*](https://x.com/cpgrabow/status/1976677325719937025)*. Even leading foreign shipyards* [*require 9–12 months*](https://x.com/cpgrabow/status/2012563154169942026) *to construct relatively less-complex* [*tankers*](https://x.com/cpgrabow/status/1689005030756716548) *(as measured from construction initiation, vice the placement of orders). Additionally, U.S.-built cargo ships are* [*highly reliant*](https://x.com/cpgrabow/status/1704482731835510806) *on imported parts and components (e.g., engines* [*from South Korea*](https://drive.google.com/file/d/1ZKsxUog3P7g5w7LP8Ei-EgveQGU5FFp3/view) *and propellers* [*from China*](https://drive.google.com/file/d/1Ykht91jEsUQmV-rlFE-lw-8IfGPZDVgu/view)*), leaving them* [*vulnerable*](https://x.com/cpgrabow/status/1745155326746206538) *to possible wartime interdiction.* > > *Unless a conflict lasts for years, it is highly questionable whether domestic shipbuilding would play a significant role in determining its outcome. This isn’t theoretical. Of the hundreds of ships ordered by the U.S. government following its entry into World War I in April 1917, only a small* [*number were delivered*](https://x.com/cpgrabow/status/1745154861887377457) *prior to the signing of an armistice in November of the following year.* > > *Possessing a domestic commercial shipbuilding capacity is not without merit. But perhaps of greater importance is access to a large, modern fleet when hostilities commence.* > > *Shipping industry veterans have* [*pointed*](https://x.com/cpgrabow/status/1983547407183892753) [*out*](https://x.com/cpgrabow/status/1983578808818057354) *that, rather than engaging in new construction, the United States could more expeditiously augment its merchant fleet by buying ships on the open market. With* [*over 56,000 ships*](https://unctad.org/system/files/official-document/tdstat48_FS014_en.pdf) *of at least 1,000 gross tons in the global fleet, including* [*nearly 7,500 tankers*](https://www.congress.gov/crs-product/R47962) *and more than* [*6,700 containerships*](https://hlt.hk/en/2024/01/03/global-container-shipping-industry-capacity-growth-and-changing-rankings-in-2024)*, there is* [*considerable choice.*](https://shipselector.com/offers/sale/cargo-ship) > > *The United States could also expand* [*existing subsidy*](https://www.maritime.dot.gov/national-security/strategic-sealift/maritime-security-program-msp) [*programs*](https://www.maritime.dot.gov/national-security/strategic-sealift/tanker-security-program) *that provide guaranteed access to U.S.-flagged vessels in times of war or national emergency, or establish a more liberalized* [*second registry*](https://www.reuters.com/world/us/us-considering-new-ship-registry-us-virgin-islands-sources-say-2025-05-08/) *to expand the pool of merchant ships. The* [*right of angary*](https://en.wikipedia.org/wiki/Angary)*, employed by the United States* [*in World War I*](https://history.state.gov/historicaldocuments/frus1918Supp01v02/d490)*, also bears consideration in the sealift calculus.* **A Flawed Document, but Maritime Challenges Exist** The MAP believes that the country’s [lowly shipbuilding position](https://www.cato.org/blog/protected-us-shipbuilding-continues-sink) stems from insufficient subsidies and government mandates. So steeped is the document in such thinking that it presents a proposed increase in the American content of ships designated as “US-built”—in other words, making compliance more onerous—as an [example of regulatory relief](https://x.com/cpgrabow/status/2022424909796786512). It is flawed in both concept and design. But while the MAP features faulty solutions, maritime challenges such as naval shipbuilding and an aging and uncompetitive domestic commercial fleet do exist. So what would a more credible reform agenda look like? In my essay, I offer some policy options: > ***Ensure continuous production**: U.S. shipyards often cite the lack of a consistent “demand signal” from Washington as a key contributor to their struggles. Such claims are not without justification. A lack of insight into future demand increases the difficulty of planning and investment to meet military shipbuilding needs. Instead of a cyclical feast-or-famine approach, the United States should aim for steadier, more predictable production.* > > *Japan offers one possible model for such an approach. According to CRS analyst Ronald O’Rourke, the country builds* [*one submarine per year*](https://armedservices.house.gov/uploadedfiles/03.11.25_spf_state_of_shipbuilding_orourke_statement.pdf)*, regardless of the overall defense environment. If more submarines are needed, the force* [*can be expanded*](https://www.aspistrategist.org.au/how-japan-could-quickly-build-up-its-submarine-force/) *by extending the lifespans of existing vessels. Conversely, retirements can be used to trim the fleet when needed. Regardless, the approach ensures steady demand, more efficient construction, and the retention of skills, equipment, and technology necessary to build such vessels.* > > ***Leverage allied shipyards**: Although the United States is fortunate to count some of the world’s most capable shipbuilders among its key allies, its ability to leverage these shipyards is greatly hampered by laws that* [*restrict the*](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section8679&num=0&edition=prelim) [*construction*](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title14-section1151&num=0&edition=prelim) [*and repair*](https://www.law.cornell.edu/uscode/text/10/8680) *of military vessels overseas. If these laws were revised, as advocated by a* [*growing number*](https://x.com/cpgrabow/status/1665730980491980802) *of experts, the path could be cleared to construct either large modules or entire vessels in* [*highly skilled*](https://x.com/cpgrabow/status/1937154267074166975) *allied yards.* > > *Domestic construction has value, but there comes a point at which it is surpassed by the benefits of utilizing allied shipyards that offer far shorter building times and dramatically lower costs. For numerous programs, including non-combatant vessels such as fleet oilers and icebreakers that have seen substantial delays and* [*cost increases*](https://x.com/cpgrabow/status/1988269818152448307)*, the national security scales have almost certainly tipped in favor of allied construction.* > > *Forgoing these capabilities in the hope that a massive and unprecedented turnaround in U.S. shipbuilding can be quickly engineered is highly risky, possibly leaving the military unable to obtain the* [*vessels it needs*](https://news.usni.org/2023/03/21/osd-comptroller-says-u-s-shipyards-cant-build-3-destroyers-a-year) *at reasonable costs and within reasonable timelines to meet national security requirements.* > > ***Reform or repeal U.S. coastwise laws**: There has long been clear evidence that U.S. coastwise laws place a significant* [*economic burden*](https://www.milkenreview.org/articles/protectionism-on-steroids) *on strategic industries such as* [*steel*](https://x.com/cpgrabow/status/1770094766639706540) *and* [*energy*](https://www.cato.org/commentary/repeal-baby-repeal-how-jones-act-strangles-us-energy)*. But these laws also fail the country on more direct national security grounds. Forcing Americans to pay inflated prices for new vessels has not proven conducive to the development of a large, modern fleet or a robust shipbuilding industry.* > > *At the very least, such laws should be reformed to allow the use of vessels constructed in allied countries. Dramatically reducing such capital costs would promote an expanded and modernized fleet, with accompanying economic and national security benefits—including additional employment opportunities for U.S. shipyards engaged in repair and maintenance work due to increased coastal commerce.* > > *A bolder approach would be to scrap the law entirely and meet national security needs through targeted subsidies that promote the expansive employment of U.S. vessels and mariners.* **Conclusion** The MAP rests on a narrow and problematic diagnosis of America’s maritime ills, assigning an undeserved primacy to the construction of large commercial ships and assuming that international competitiveness can be engineered through sufficient subsidies and protectionism. History and economics suggest otherwise. The United States has repeatedly attempted to revive the industry through robust government interventions—typically based on shielding US shipbuilding from competitive market pressures—only to find that the approach cannot produce globally competitive yards. And even if somehow successful, there is little reason to think this would meaningfully alleviate naval shipbuilding shortfalls or address other national security needs. The United States must instead recognize that what it primarily lacks is not subsidies or industrial policy levers but policies that embrace comparative advantage, leverage allied capacity, and reflect the realities of modern shipping and shipbuilding. Until that lesson is absorbed, the nation’s maritime debates are likely to continue circling around the same costly and unproductive ideas. ##### Related Tags [Trade Policy](https://www.cato.org/trade-policy), [Project on Jones Act Reform](https://www.cato.org/project-jones-act-reform) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).