On March 12, 2024, five national labor unions filed a petition with the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act of 1974 requesting an investigation into the acts, policies, and practices of China in the maritime, logistics, and shipbuilding sector. Section 301 allows the United States to respond to unreasonable or discriminatory foreign government practices that burden or restrict U.S. commerce. Arguing that the “American commercial shipbuilding industry is a shell of its former self,” the petition states that, in the past 50 years, “the number of commercial shipyards in the United States has plunged by more than 70 percent, tens of thousands of jobs have been lost, and the United States now produces only a fraction of one percent of the world’s commercial vessels.” 

The petition alleges that “[t]he biggest obstacle to the industry’s recovery is the unfair trade practices of the world’s largest shipbuilding nation: China.” China’s actions, beginning as far back as 2001, have “seized market share, suppressed prices, and created a worldwide network of ports and logistics infrastructure that threaten to discriminate against U.S. ships and shipping companies, disrupt supply chains, and undermine vital national security interests.” The petition alleges that Chinese state-owned enterprises and other facilities in China are now capable of producing over 1,000 ocean-going vessels a year, while the United States currently produces fewer than ten. The Chinese government’s Five Year Plans and Made in China 2025 policies have identified its shipbuilding industry as a key industry, and the petition alleges that China “has funneled hundreds of billions of dollars and adopted numerous supporting policies to achieve the goals laid out in plans for shipbuilding.” This supposedly includes various Chinese government interventions, including policy loans from state-owned banks, equity infusions and debt-for-equity swaps, the provision of steel plate from state-owned steel producers at below market prices, tax preferences, and other government support.

The petition further alleges that via China’s Maritime Silk Road initiative, China has promoted state-owned shipping and logistics companies, invested in strategically located foreign ports and terminals, dominated the supply of cranes used at such ports, and promoted government-sponsored logistics platform, LOGINK. As a result, the petition argues that related Chinese companies “have become leaders in financing, building, operating, and owning port terminals around the world.” Such market share allegedly gives China leverage in key industry sectors, access to sensitive maritime traffic data, and could allow China to abruptly disrupt critical supply chains, or otherwise “inflict severe and widespread economic coercion or damage against commercial or state actors that do not align with China’s geopolitical goals.”

USTR Katherine Tai confirmed USTR’s receipt of the 4,000 page petition and noted that, “We have seen [China] create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries, and critical minerals, harming American workers and businesses and creating real risks for our supply chains.” USTR has 45 days to review the allegations set forth in the petition and determine whether to initiate an investigation to determine whether China’s acts, policies, and practices are unreasonable, unfair, inequitable, and discriminatory, and whether they have burdened and restricted U.S. commerce.