The U.S. Trade Representative’s Office on Thursday stated that China's dominance in the global shipbuilding and maritime sectors, as well as logistics, is "unreasonable". It is also "actionable" according to U.S. Trade Law.

The USTR investigation, which was first reported on by on Tuesday, didn't include any specific recommendations of sanctions against Beijing. This leaves the next steps to Donald Trump, President-elect, who will take office on Monday.

USTR stated that its report "supports the determination that China’s targeting of maritime, logistics and shipbuilding sectors to gain dominance is unreasonable, burdens or limits U.S. trade and therefore is actionable."

The embassy of China in Washington was not immediately available to comment on this investigation.

U.S. Trade Rep Katherine Tai initiated the investigation in April 2024, at the request of United Steelworkers (USW) and four other U.S. Unions. Section 301 of 1974's Trade Act allows the U.S. government to penalize countries who engage in "unjustifiable", "unreasonable", or burden U.S. Commerce.

Since 2018, both President Biden and Trump have used Section 301 to impose tariffs on Chinese imports.

Tai stated in a press release that the U.S. shipbuilding industry has declined to less than 5 ships per year, from 70 in 1975. Meanwhile, China builds 1,700 vessels annually.

Tai stated that "Beijing’s targeted dominance in these sectors undermines fair and market-oriented competition. It increases economic security risks. And it is the biggest barrier to revitalizing U.S. Industries, as well the communities who rely on them."

She said that "these findings under Section 301 will set the stage for immediate action to invest in America, and strengthen our supply chain."

According to the report, China's efforts to dominate shipbuilding, maritime and logistic sectors are due to Beijing's "extraordinary controls" over enterprises and firms in the sector. This results in a lack of opportunities for market-oriented companies. This reduces competition, and in turn increases China's dependence.

According to the report, Chinese industries benefit from China's ineffective labor laws, excess capacity of steel production, and control over digital logistic services.

U.S. Senator Mark Kelly said that the report demonstrated the need to revive the U.S. shipbuilding industry and maritime industries through his legislation.

Kelly, using the acronym PRC for the People's Republic of China, said: "The PRC's unjust trade practices enable China's dominance of the oceans while harming American workers and national security." (Reporting and writing by Caitlin Cushing and Christopher Cushing; Reporting by David Lawder, Andrea Shalal)

(source: Reuters)