Robert Kuttner
China’s massive subsidy program to take over the world’s shipbuilding industry is laid out in great detail, in a new report by the U.S. Trade Representative. The report was written in response to a formal complaint filed by five unions under Section 301 of the Trade Act. Now it’s up to President-elect Trump to decide what kinds of sanctions to apply.
The unions, led by the Steelworkers, include the International Association of Machinists and Aerospace Workers, the International Brotherhood of Boilermakers, and the International Brotherhood of Electrical Workers—all active in shipbuilding.
The USTR report explicitly finds China’s policies “actionable” under Section 301, meaning that the president can choose from a large menu of possible retaliations. It depicts, in one industry, the China challenge writ large—and the folly of the U.S. free-trade policy pursued since Reagan, with the complicity of Democratic presidents until Biden.
China extensively subsidizes its domestic industry, and restricts competition from non-Chinese shipbuilders. This “displaces foreign firms, deprives market-oriented businesses and their workers of commercial opportunities, and lessens competition and creates dependencies on the PRC, increasing risk and reducing supply chain resilience,” the report found.
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