Over the last 20 years, China's shipbuilding industry has grown to global dominance, with the country having manufactured more commercial vessels by tonnage in 2024 than U.S. shipyards have built since the end of World War II. 

A report from the Center for Strategic & International Studies (CSIS) describes how China's shipbuilding sector has undergone a "striking metamorphosis" spanning decades, with the state-owned China State Shipbuilding Corporation (CSSC) now selling 75% of its commercial production to foreign companies, including those based in the U.S. The report warns of the larger global security risks that poses to the rest of the world, with the CSSC funneling billions of dollars of foreign money back into Chinese shipyards that churn out warships for the country's navy. The CSIS estimates that at the current pace of production, China will grow its naval fleet from 234 ships to 425 by 2030, compared to the United States' projected total of 300.

"The meteoric rise of China’s commercial shipbuilding industry is closely tied to the relentless pace of its military modernization," the report reads. "Rather than establishing firewalls between civilian and military production, China has actively sought to integrate these activities."

Four of the largest unions in the U.S. echoed these concerns in a February letter to President Donald Trump, calling on him to impose "tough penalties" on vessels built by China, and focus on reviving the United States' own shipbuilding industry. Weeks later, the U.S. Trade Representative (USTR) put forth a proposal to start charging non-Chinese shipping companies operating Chinese-built ships fees of up to $1.5 million per port entry, a policy that was among several recommendations listed by the CSIS in its report. The plan would also require 5% of all U.S. exports to be moved on U.S-built vessels by the end of a seven-year ramp-up period.

The USTR's proposal has been met with criticism by leaders in the U.S. retail and agriculture sectors, who have warned that the added costs from new port entry fees would get passed down to cargo owners and consumers alike. In a February 26 release, Agriculture Transportation Coalition executive director Peter Friedman also asserted that the fees would make U.S. ag exports "unaffordable and noncompetitive in global markets," by forcing U.S. companies to shoulder added costs not shared by foreign competitors trading with other countries.