Ships for America Act: How Bipartisan Legislation Could Revive American Maritime Dominance

Senators Todd Young and Mark Kelly explain their comprehensive Ships for America Act designed to rebuild American maritime capacity from 80 to 250 oceangoing vessels within a decade.

The Ships for America Act represents ambitious bipartisan legislation to address America's maritime vulnerability, targeting dramatic expansion of US-flagged vessels and shipbuilding workforce to counter China's overwhelming naval superiority.

Key Takeaways

• America's oceangoing fleet has collapsed from 400 vessels in 1986 to just 80 today, while China operates 5,500 commercial ships
• The Ships for America Act proposes reaching 250 US-flagged merchant vessels within 10 years through comprehensive federal support
• Chinese maritime dominance creates severe national security risks, with potential economic shutdown capability through shipping restrictions
• The legislation addresses workforce development, shipyard capacity, and vessel construction through a "three-legged stool" approach
• Bipartisan support reflects growing recognition that industrial policy requires national security premiums over pure market efficiency
• The bill includes provisions for maritime security advisers, trust funds, cargo preferences, and international cooperation with allies
• Funding mechanisms rely primarily on maritime industry fees rather than direct taxpayer expenditures

Timeline Overview

• 00:00–08:30 — Introduction to Maritime Crisis: Hosts discuss America's atrophied shipbuilding capacity and bipartisan support for rebuilding efforts
• 08:30–18:45 — Current State Assessment: Senator Kelly details America's decline from 400 to 80 vessels while China operates 5,500 ships
• 18:45–32:20 — Historical Context and Causes: Senator Young explains how Chinese subsidies and American efficiency focus created competitive disadvantage
• 32:20–48:15 — Institutional Knowledge Challenge: Discussion of workforce development, shipyard capacity, and the three-legged stool strategy
• 48:15–62:30 — Ships for America Act Details: Comprehensive overview of the 344-page legislation's provisions and funding mechanisms
• 62:30–75:00 — Implementation Challenges: Market discipline, ally cooperation, Chinese retaliation risks, and cost implications for American consumers

America's Maritime Collapse and National Security Crisis

American maritime capacity represents one of the most dramatic industrial declines in modern history. Senator Mark Kelly, a 1986 graduate of the US Merchant Marine Academy, witnessed firsthand the deterioration from 400 US-flagged oceangoing vessels to today's mere 80 ships. This represents a staggering 80% reduction over four decades, occurring while China expanded its commercial fleet to 5,500 vessels.

The national security implications extend far beyond commercial considerations. Admiral Paparo, head of Indo-Pacific Command, recently briefed senators on the Military Sealift Command's deteriorating condition, both materially and from workforce perspectives. The vulnerability became apparent during 2021-2022 supply chain disruptions, demonstrating how foreign shipping dependencies could cripple American economic activity.

China's maritime dominance creates unprecedented coercive potential. President Xi could theoretically halt Chinese ships from carrying cargo to the United States, effectively shutting down significant portions of the American economy. This capability represents a fundamental threat to American sovereignty and economic independence that previous generations of policymakers never contemplated.

• Chinese vessels transport most cargo entering American ports, creating single-point-of-failure vulnerabilities
• Military Sealift Command lacks sufficient capacity for potential Pacific conflict scenarios requiring troop and equipment movement
• Supply chain bottlenecks during the pandemic demonstrated economic fragility from foreign shipping dependence
• Congressional briefings reveal growing military concern about maritime capacity shortfalls in potential conflict situations

The Strategic Logic Behind Industrial Maritime Policy

The Ships for America Act emerges from fundamental recognition that American economic philosophy prioritizing efficiency over resilience created strategic vulnerabilities. Senator Todd Young articulates how Chinese subsidization of strategic industries, including shipbuilding, systematically undermined American competitiveness through artificially low pricing that private markets cannot match without government intervention.

This dynamic mirrors semiconductor industry challenges that prompted the CHIPS and Science Act. Asian nations, particularly China, recognized shipbuilding's dual commercial and military importance decades ago, investing heavily while America relied on market mechanisms. The result created a concentrated global industry where subsidizing nations gained overwhelming advantages over market-based competitors.

The legislation reflects evolving Washington perspectives on industrial policy's necessity. Traditional American skepticism toward government intervention has yielded to recognition that adversaries viewing commercial transactions through military and geopolitical lenses require strategic responses. The concept involves accepting "national security premiums" for domestic production capabilities rather than relying exclusively on lowest-cost foreign providers.

• Chinese shipbuilding subsidies create unfair competitive advantages that private American companies cannot overcome
• National security considerations require accepting higher costs for domestic capacity preservation and development
• Historical American free-market philosophy proves inadequate against state-directed industrial strategies
• Bipartisan consensus emerges around necessity of government intervention in strategic industries

The Three-Legged Stool: Workforce, Shipyards, and Vessels

Senator Kelly's framework conceptualizes maritime rebuilding through interconnected workforce development, shipyard expansion, and vessel construction initiatives. Newport News Shipbuilding, led by his former classmate Jennifer Boykin, exemplifies both American shipbuilding capabilities and workforce challenges. The facility produces world-class Ford-class aircraft carriers and Virginia-class submarines but struggles continuously with skilled worker recruitment and retention.

Workforce development represents the critical foundation for sustainable maritime expansion. The legislation supports merchant marine academies, state maritime schools, and unlicensed mariner training programs while funding shipyard-specific skills development for welders, pipe fitters, and electricians. This comprehensive approach addresses both licensed officers and skilled trades essential for shipbuilding operations.

The ecosystem benefits extend beyond direct maritime applications. Enhanced workforce capacity and supplier networks support naval shipbuilding requirements while creating competitive environments that reduce costs and improve availability. Currently, naval contractors often face single or dual vendor situations for critical components, creating bottlenecks and inflated pricing that comprehensive maritime expansion could alleviate.

• Newport News Shipbuilding demonstrates American capability while highlighting workforce recruitment challenges
• Training programs must address both licensed maritime officers and skilled shipyard trades
• Expanded supplier ecosystems reduce vendor concentration and improve naval shipbuilding efficiency
• Three-legged stool approach ensures sustainable capacity rather than isolated interventions

Legislative Architecture and Implementation Strategy

The Ships for America Act spans 344 pages addressing virtually every aspect of maritime industry reconstruction. Key provisions include establishing a maritime security adviser within the White House leading an interagency Maritime Security Board for strategic coordination. The legislation creates a Maritime Security Trust Fund reinvesting industry duties and fees into security programs and infrastructure development.

The ambitious goal targets 250 oceangoing merchant vessels within 10 years through multiple mechanisms. A Strategic Commercial Fleet Program provides framework for rapid expansion while rulemaking committees establish appropriate commercial maritime regulations and standards. Government cargo preferences require federally-funded shipments to utilize US-flagged vessels, creating guaranteed demand for domestic capacity.

Funding mechanisms deliberately avoid direct taxpayer appropriations, instead relying on maritime industry fees and tonnage charges. Tax credits provide construction incentives while Title 11 federal ship financing offers capital access for vessel acquisition. The self-funding approach addresses fiscal responsibility concerns while ensuring maritime industry stakeholders contribute to capacity development.

• Maritime Security Trust Fund creates sustainable financing through industry fees rather than general taxpayer funding
• White House maritime security adviser ensures whole-of-government coordination and strategic implementation
• 250-vessel target within 10 years represents aggressive but achievable expansion from current 80-ship baseline
• Government cargo preferences create immediate demand while private markets develop organic growth

Market Discipline and International Competition Strategies

Addressing industrial policy risks requires maintaining competitive pressure despite government support. Senator Young emphasizes that tax code administration through neutral arbiters like the IRS reduces cronyism risks compared to direct grant programs. The approach leverages existing institutional mechanisms while avoiding creation of new bureaucratic structures prone to capture or favoritism.

International market discipline emerges through diplomatic efforts to open foreign markets for American-built vessels. The distributed nature of global shipping markets provides opportunities for competitive pressure, though concentrated shipbuilding in subsidizing nations currently limits options. Trade policy coordination becomes essential for creating reciprocal market access that enforces efficiency and quality standards.

Allied cooperation offers mechanisms for maintaining competitive dynamics while advancing security objectives. South Korean investment in Philadelphia Naval Shipyard demonstrates how trusted partners can contribute technology and expertise while supporting American capacity development. This approach mitigates Chinese retaliation risks while building broader coalitions supporting maritime expansion.

• Tax code administration provides neutral oversight reducing cronyism and waste compared to direct grant programs
• International market access requires diplomatic coordination to ensure competitive pressure on American shipbuilders
• Allied partnerships enable technology transfer and investment while maintaining security considerations
• South Korean shipyard investment exemplifies how trusted partners can support American capacity without compromising security

Economic Implications and Consumer Cost Considerations

The Ships for America Act's economic impact reflects tension between short-term costs and long-term stability. Shipping expert Lars Jensen argues the legislation could increase transportation costs for American importers and exporters, potentially affecting broader inflation through goods pricing. However, senators emphasize that economic certainty and supply chain stability justify accepting marginal price premiums.

The pandemic demonstrated how shipping cost volatility creates broader economic disruption beyond absolute price levels. Extreme spikes followed by sharp declines prevented effective household and business planning while creating inflationary pressures throughout the economy. Enhanced American shipping capacity provides greater control over critical supply chain variables, reducing volatility even if absolute costs increase modestly.

The sovereignty argument transcends pure economic calculations. Chinese economic coercion capabilities through shipping restrictions represent existential threats to American policy independence. The costs of maintaining domestic shipping capacity pale compared to potential economic damage from foreign manipulation of critical transportation infrastructure during geopolitical tensions.

• Marginal cost increases may result from domestic shipping requirements but provide protection against extreme volatility
• Pandemic shipping disruptions demonstrated how transportation costs affect broader economic stability and planning
• Economic sovereignty considerations justify accepting price premiums to avoid foreign coercion capabilities
• Long-term stability benefits outweigh short-term cost increases in strategic industry protection

Geopolitical Risks and Chinese Retaliation Scenarios

Chinese retaliation represents an inevitable consideration given their massive maritime capacity and aggressive responses to American industrial policy initiatives. The legislation's 15-year timeline for requiring 10% of Chinese imports on US-flagged vessels provides gradual implementation while building American capacity. Senators acknowledge retaliation possibilities but emphasize that vulnerability to Chinese threats necessitates accepting these risks.

The reciprocity principle provides diplomatic justification for American maritime preferences. Chinese subsidization of strategic industries and preferential treatment for domestic companies creates precedent for American responses protecting national interests. The legislation follows longstanding international trade principles while addressing asymmetric Chinese practices that disadvantage market-based competitors.

Allied coordination becomes essential for managing Chinese retaliation and building broader coalitions supporting maritime expansion. European and Pacific partners share interests in reducing Chinese shipping dominance while maintaining open sea lanes for commercial activity. Coordinated policies among trusted partners create larger markets for American vessels while distributing retaliation risks across multiple targets.

• Ten percent cargo requirement represents modest beginning while building capacity for larger future requirements
• Reciprocity principles provide diplomatic justification for preferences matching Chinese subsidization practices
• Allied coordination distributes retaliation risks while creating larger markets for American maritime expansion
• Strategic patience required for long-term capacity building despite short-term Chinese pressure tactics

Common Questions

Q: How will the Ships for America Act affect shipping costs for American consumers?
A: The legislation may create marginal cost increases but provides greater stability and protection against volatile pricing.

Q: What distinguishes this from direct government shipbuilding like China's approach?
A: The act maintains private ownership and market mechanisms while providing incentives rather than government-operated fleets.

Q: How does the bill address workforce shortages in shipbuilding trades?
A: Comprehensive training programs support both maritime academies and shipyard skills development for welders, electricians, and pipe fitters.

Q: What prevents this from becoming a subsidy program without competitive pressure?
A: Tax code administration, international market access, and allied partnerships maintain competitive discipline while building capacity.

Q: How quickly could America rebuild meaningful maritime capacity under this legislation?
A: The bill targets 250 oceangoing vessels within 10 years, representing more than tripling current US-flagged fleet capacity.

Conclusion

The Ships for America Act represents a fundamental recognition that American economic sovereignty requires accepting short-term costs to avoid long-term vulnerabilities that threaten national independence. Senators Young and Kelly articulate how four decades of maritime decline created unprecedented Chinese leverage over American economic activity, necessitating comprehensive government intervention to rebuild strategic capacity. The legislation's bipartisan support reflects growing consensus that pure market efficiency cannot address national security challenges posed by adversaries who view all commercial activity through military and geopolitical lenses. Success requires sustained commitment to workforce development, shipyard expansion, and vessel construction while maintaining competitive pressure through international cooperation and market discipline mechanisms.

Practical Implications

• For Defense Contractors: Expanded maritime capacity creates opportunities for naval shipbuilding support and component supply chain development
• For Shipping Companies: Cargo preference requirements and subsidies provide incentives for US-flagged vessel investment and operation
• For Skilled Workers: Comprehensive training programs offer career opportunities in shipbuilding trades without requiring four-year degrees
• For Importers/Exporters: Prepare for potential modest cost increases offset by greater supply chain stability and reduced volatility
• For Allied Nations: Coordinate maritime policies and investment opportunities while supporting American capacity rebuilding efforts
• For Investors: Monitor shipyard stocks and maritime service companies positioned to benefit from federal capacity expansion initiatives
• For Policy Makers: Consider how maritime legislation demonstrates broader industrial policy frameworks applicable to other strategic industries