Trump Signs Executive Order to Boost Shipbuilding Industry

On Wednesday, U.S. President Donald Trump issued an executive order designed to lessen China's control over the international shipping sector and to revitalize American ship construction.

Trump told reporters the U.S. would be spending “a lot of money on shipbuilding” to restore American capacity in the sector.

The executive order introduces tax incentives for "maritime opportunity zones," aims to boost the U.S. Navy’s activity in the Arctic region, and overall seeks to rejuvenate the production of both naval vessels and cargo ships within the country.

It specifically directs the Secretary of Defense to evaluate various possibilities, such as using the powers granted under Title III of the Defense Production Act, with the aim to invest in and grow the Maritime Industrial Base. As stated in a White House factsheet about this directive, "Taking such steps will aid in more effectively utilizing and capitalizing on current authority levels to encourage both governmental and commercial investments within the Maritime Industrial Base."

This directive instructs the United States Trade Representative (USTR) to provide recommendations concerning China’s anti-competitive practices in the shipbuilding sector. Additionally, it mandates that the Secretary of Homeland Security ensure the proper enforcement of the Harbor Maintenance Fee and other levies on imported goods from abroad arriving into the U.S., specifically to stop them from being evaded through transshipments via Canada or Mexico.

"This will finally halt a long-standing inequitable practice, guaranteeing that all goods arriving in the U.S. are charged the correct applicable fees, thereby generating extra funds for reinvestment into the maritime sector," as stated in the White House summary.

Significantly, the directive creates a Maritime Security Trust Fund aimed at providing stable financing for maritime initiatives. It also introduces a shipbuilding financial incentive scheme designed to encourage more private capital into U.S. shipyards. Furthermore, it outlines the establishment of Maritime Prosperity Zones meant to attract investments in coastal areas; these zones will draw inspiration from President Trump’s Opportunity Zone idea.

The directive instructs the Secretary of Defense to carry out an assessment and provide guidelines regarding the financing, maintenance, assistance, and activation of a substantial standby reserve fleet. This ensures sufficient guaranteed access to shipping capabilities when required for military activities.

Jan Sramek, the CEO of California Forever, shared his insights on the executive order via X, pointing out that a single Chinese shipyard produced more vessels last year than all U.S. shipyards combined have since World War II.

“We are severely lagging behind,” Sramek stated. “To catch up, we must integrate contemporary manufacturing techniques with production capabilities that rival China’s magnitude.”

This aligned with Trump’s comments in the Oval Office when signing the directive, criticizing the decrease in domestic warship manufacturing over the past few years.

"We used to construct a ship every single day, but nowadays, we barely manage one ship per year, despite having the capability to do more," he stated.

Sramek’s post outlined California Forever’s objective to transform three miles of shoreline into an extensive shipbuilding facility, aiming to revive the maritime manufacturing capabilities of the Bay Area to their World War II-era standards.

The Solano Shipyard has ample space to house various shipbuilding operations," Sramek noted. "This facility could transform into another Silicon Valley – a starting point for groundbreaking, transformative innovations as businesses develop commercial ships, naval crafts, and advanced autonomous marine systems.

Even though there’s a central location close to Collinsville, Sramek mentioned that the effects might extend throughout Solano County, the whole Bay Area, and even further.

"Whether you're in coastal towns such as Vallejo/Mare Island, Rio Vista, Stockton, West Sacramento, Richmond, and Pittsburg or further inland at places like Suisun, Fairfield, and Vacaville, all these locations allow residents to construct and transport components via barges or railways," he noted.

In Solano County, people have been speculating about how shipbuilding might impact the area.

On Wednesday, Congressman John Garamendi, along with the co-authors of the SHIPS Act—Senators Mark Kelly and Todd Young, alongside Congressman Trent Kelly—released a collective statement endorsing the executive order and committing to advance their legislative efforts.

This executive order acknowledges the critical necessity of adopting an all-encompassing strategy to rejuvenate the U.S. shipbuilding and maritime sectors, aligning with the objectives of our SHIPS for America Act," he stated. "The American maritime sector and ship construction capabilities have significantly fallen short over time, enabling China to take the lead and present a substantial challenge at sea. The move made today by the Trump administration demonstrates their recognition of this threat and their immediate need to change direction in order to bolster our national defense and stimulate economic growth."

The statement indicated their encouragement as "many aspects of the executive order align with components of our SHIPS for America Act." They announced plans to reintroduce the SHIPS for America Act soon, seeking additional congressional backing "to secure the necessary authorization to genuinely rejuvenate the U.S. shipbuilding and maritime sectors." They committed themselves to collaborating with the administration "towards getting this act approved," emphasizing that doing so will result in putting more Americans to work constructing deep-sea vessels and operating commercial fleets under the American flag, thereby restoring America’s dominance in international seafaring leadership.

Recently, Garamendi organized a press event at Mare Island with the aim of attracting federal funding to rejuvenate the drydock facilities for naval maintenance. Additionally, California Forever has emphasized the potential development of the Solano Shipyard, a sentiment echoed by numerous local political figures.

In November, when prompted by the U.S. Navy for input regarding shipbuilding as a potential economic opportunity through their Request For Information process, California Forever started exploring this avenue. This was verified recently via email from Michael Fortney, who serves as the Director of Partnerships at California Forever, addressed to Solano County Administrator Bill Emlen.

On Wednesday morning, the Bay Area Council expressed backing for California Forever’s initiative to establish a large-scale shipyard and maritime sector complex in Solano County. This move aims at reviving the Bay Area’s international shipping capabilities and will bring numerous high-paying employment opportunities to the area.

Envisioning a premier shipbuilding complex as an integral component of a robust local maritime sector from the shoreline, one could sense the enthusiasm," remarked Jim Wunderman, CEO of the Bay Area Council. "Such opportune circumstances for realizing ambitious plans do not occur frequently; thus, these instances demand immediate action. The advantages for the Bay Area, California, and our country will be significant. It's time to set sail into this new era aimed at rejuvenating the industrial prowess of the Bay Area.

Mayor John Carli of Vacaville described the executive order as a significant advancement for the county and the broader area, tackling the disparity between China and the United States while revitalizing the region’s seafaring traditions. He expressed gratitude to California Forever personnel for collaborating with military and political figures to attract well-paying national defense positions to Solano County.

I applaud the President's acknowledgment of the strategic importance of rejuvenating American shipbuilding to bolster our national security," remarked Carli. "Norther California is poised to spearhead this revival, generating numerous high-skilled job opportunities, invigorating our local economies, and reclaiming its position as a key center for U.S. maritime industrial advancement and national defense.

Assemblymember Lori Wilson showed enthusiasm regarding the prospects available at the local, state, and federal levels.

It synchronizes economic progress with national security objectives and highlights the significance of cooperation within the region," she stated. "Now is the moment for our leaders to join forces and delve into this initiative; we have emerged as strong contenders. I am eager to work alongside everyone to establish our region at the forefront in this domain.