OpEd:Turning the Tide: How Trade Talks with China Could Revitalize the U.S. Maritime Industry — If Washington Gets It Right

As trade negotiations between the United States and China inch closer to resolution, stakeholders across multiple industries are holding their breath. For many, the focus is on tariffs, supply chains, and global competition. But for the long-neglected U.S. maritime sector, these talks may represent a once-in-a-generation opportunity to not only regain relevance, but to reassert strategic and economic independence on the high seas.

Once a dominant global maritime power, the United States today operates a commercial fleet of fewer than 80 ocean-going vessels under the U.S. flag engaged in international trade — a startling figure compared to China’s rapidly expanding commercial fleet of over 5,500 ships. While China aggressively invests in shipbuilding, port infrastructure, and international shipping dominance, the U.S. fleet has withered due to decades of policy neglect, cost disadvantages, and a reliance on foreign-flag carriers.

However, embedded within the complex matrix of trade negotiations now underway are crucial leverage points — policy tools that, if correctly applied, could reverse the U.S. decline at sea. The conversation must shift from simply achieving "better trade terms" to ensuring that the structure of any new deal strategically supports a revival of American maritime strength.

Cargo Preference: Linking Trade to U.S. Tonnage

At the heart of this revival lies the concept of cargo preference — the mandate that a portion of U.S. government-sponsored exports be shipped on U.S.-flagged vessels. These rules already apply to food aid and military cargo, but broader application tied to trade deals could be transformative.

If the U.S. is to ship more agricultural exports, liquefied natural gas (LNG), or heavy machinery to China under a new agreement, those exports should — by statute — move on American hulls crewed by American mariners. This is not protectionism; it’s sound strategic and economic policy. Enforcing or expanding cargo preference laws in tandem with any trade liberalization ensures that the growth in exports translates into growth for U.S. shipping, not just foreign carriers.

Incentives to Level the Playing Field

The U.S. Maritime Security Program (MSP) currently pays a modest stipend to a small group of commercial U.S.-flagged vessels to ensure their availability in times of war or emergency. While effective in theory, it’s far too limited in scope. The program supports just 60 ships, many of which are aging and increasingly expensive to operate.

To compete with foreign fleets backed by government subsidies and lower labor costs, MSP must be expanded. A modernized version should include:

• Higher stipends tied to inflation and crew costs,

• Support for newly flagged or U.S.-built ships,

• Priority cargo routing under any new trade frameworks.

Furthermore, tax incentives for shippers that choose U.S.-flagged vessels — as well as direct financing support for U.S. shipbuilders through the Maritime Administration (MARAD) — could lower the barriers for entry and encourage private investment in American tonnage.

Jones Act: Not Just a Domestic Law

Critics often cite the Jones Act — which mandates that cargo moved between U.S. ports must be carried on U.S.-flagged, U.S.-built, U.S.-crewed, and U.S.-owned ships — as outdated or restrictive. But in the context of a trade boom, it offers strategic potential.

Growth in container traffic from Asia will require significant inland distribution and port-to-port transfer capacity. Rather than pushing all of this cargo onto trucks and rails, a new emphasis on short-sea shipping along U.S. coastlines and inland waterways could offer efficiency, sustainability, and security — all within the scope of the Jones Act.

What’s needed now is not repeal or relaxation of the law, but optimization. That includes:

• Investing in smaller U.S. feeder vessels,

• Upgrading port infrastructure for intermodal transfers,

• Streamlining regulatory burdens for Jones Act compliance.

If cargo volumes rise as projected, this shift can ease inland congestion and channel new business to American mariners and shipyards.

U.S. Shipbuilding Must Be Part of the Strategy

Any policy that aims to revitalize the U.S. maritime industry must include investment in domestic shipyards. American shipbuilding capacity is currently insufficient to meet a large-scale resurgence, but that too can be addressed with targeted action.

The federal government should:

• Restore shipyard grant programs for modern equipment and workforce development,

• Provide procurement guarantees for dual-use (military/commercial) vessels,

• Expand the Tanker Security Program and establish similar cargo fleet programs for other vessel types (e.g., bulk carriers, containerships, LNG carriers).

Moreover, any trade deal with China should contain enforceable protections against unfair shipbuilding subsidies, market dumping, and government-backed carrier monopolies — all of which have contributed to the collapse of U.S. competitiveness.

Strategic and National Security Imperatives

Beyond economics, revitalizing the U.S. merchant marine is a national security imperative. In a prolonged conflict or supply chain disruption, the U.S. would be hard-pressed to move critical goods and military assets without relying on foreign ships — some flagged to strategic rivals.

For many maritime industry observers, the U.S. sealift capability has been on life support for decades. A trade-driven maritime resurgence, if properly structured, could be the defibrillator.

It’s not simply about cargo — it’s about control, resiliency, and the ability to project American economic power and humanitarian aid without permission from foreign registries. It's about common sense.

The Window Is Now

Trade negotiations rarely offer more than modest rebalancing in industrial sectors already dominated by globalized supply chains. But in maritime, the U.S. has room to grow from near-zero. Even modest gains — a few dozen new ships, expanded domestic routes, a revived shipyard or two — would mark enormous progress in a sector that has been in decline for half a century.

If the Trump Administration — or any future administration — wants to secure lasting economic wins from trade, it must tie that growth directly to the American maritime industry. Cargo preference, financial incentives, Jones Act optimization, and MSP expansion are not idealistic wish lists — they’re foundational steps that must be enacted in parallel with any trade deal.