By Andrea Shalal

WASHINGTON (Reuters) – US President Joe Biden’s administration has concluded that China is using unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, three sources familiar with the matter said. results of a month-long trade investigation told Reuters.

US Trade Representative (USTR) Katherine Tai launched the investigation in April 2024 at the request of the United Steelworkers and four other US unions under Section 301 of the Trade Act of 1974, which allows the US to punish foreign countries. to engage in practices that are “unreasonable” or “unreasonable,” or burdensome to US commerce.

The investigators concluded that China targeted the shipbuilding and maritime industries for dominance, using financial support, barriers for foreign companies, forced technology transfer and theft of intellectual property and policies of procurement to give the ship industry and maritime advantage, as one of the sources, which is not authorized to speak publicly.

Beijing has also “severely and artificially suppressed Chinese labor costs in the maritime, shipbuilding and logistics sectors,” the person added, citing excerpts from the report.

There was no immediate comment available from USTR, the White House or President-elect Donald Trump’s transition team. Chinese officials were not immediately available for comment.

The investigation cites data showing that China’s share of the $150 billion global shipbuilding industry has grown to more than 50% by 2023 from about 5% in 2000, largely aided by government subsidies, while once the dominant US shipbuilders saw their share fall below 1%. South Korea and Japan are the next largest shipbuilders.

The report provides a new cudgel for the incoming administration to hammer China, and could pave the way for tariffs or port charges on Chinese-made ships, as unions have suggested. Such a move would likely come after a public comment period, they said.

Trump used the same Section 301 law to impose tariffs on hundreds of billions of dollars worth of Chinese imports during his first term after a USTR investigation found that China had abused intellectual property. in the US and forced the transfer of US technology to Chinese companies.

The USTR will release its findings later this week, days before Biden, a Democrat, leaves office on Jan. 20, the sources said.

The report comes on the heels of sharp criticism from the US and other Western powers of China’s aggressive industrial policies and overproduction of commodities such as steel, and marks a rare bipartisan agreement on need to fix US shipbuilding. China denies any wrongdoing.

The report follows a four-year effort by the Biden administration to reduce China’s dominance by maintaining Trump-era tariffs, adding new ones, including on electric vehicles, and imposing a range of tariffs. export control.

Tai’s office last month announced a last-minute trade investigation into older Chinese-made “legacy” semiconductors that could pile up more U.S. tariffs on chips from China that move in everyday items from cars to washing machines to telecom equipment.

Experts agree that rebuilding the once vibrant US shipbuilding and maritime industries will take decades and cost tens of billions of dollars. Tariffs are not enough, they say.

“China’s targeting of the maritime, logistics and shipbuilding sectors for dominance is the biggest obstacle to the revitalization of US industries in these sectors,” the report concluded, according to an excerpt shared by Reuters. .

Scott Paul, president of the American Alliance for Manufacturing, a nonprofit labor-business partnership, said he understands the findings are compelling.

“My understanding is that … a process will be put in place to try to stop the erosion of our shipbuilding industry base and to start it up again,” he said.

Trump, who has said he will increase tariffs on Chinese goods by up to 60%, last week hammered out its moves to dominate commercial and military shipbuilding, telling radio host Hugh Hewitt that the US is “suffering too much” and needs to change course.

He also suggested that the US should turn to allies to build necessary naval vessels for the US military.

Trump’s incoming national security adviser Mike Waltz is also involved in the issue, drafting a bipartisan bill with Democratic Senator Mark Kelly to revive the US shipbuilding industry before he resigned from Congress.

“We’re way too dependent on China in particular. We don’t surge capacity. We have very little shipbuilding capacity, and for a superpower that is completely unacceptable,” said Paul.

The US now has only 20 public and private shipyards from over 300 American shipyards in the early 1980s. Experts say demand is strong and growing for both civilian and military vessels.