Transcript of Ranking Member Krishnamoorthi’s Testimony at USTR Public Hearing Regarding Proposed Actions in Section 301 Investigation on China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance
WASHINGTON, D.C. – Today, Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party (CCP) provided testimony at the United States Trade Representative’s (USTR’s) public hearing on proposed action in the Section 301 investigation of the People’s Republic of China’s (PRC’s) policies and practices to dominate the maritime, logistics, and shipbuilding sectors.
Background
On March 12, 2024, five national labor unions, led by the United Steelworkers, filed a petition with the USTR under Section 301 of the Trade Act of 1974 requesting an investigation into the acts, policies, and practices of the PRC in the maritime, logistics, and shipbuilding sectors.
Following the petition’s filing, the Biden administration launched an investigation and concluded that the CCP had worked for decades to dominate these industries globally through unfair and aggressive non-market practices.
In February, the Select Committee released a bipartisan statement in support of the Trump administration’s announcement on proposed actions to counter the CCP’s unfair maritime practices and help revitalize the U.S. shipbuilding industry.
“We are firmly committed to working on a bipartisan basis to hold the CCP accountable for its unfair maritime practices and to revitalize our domestic shipbuilding industry and workforce, restoring America’s identity as the preeminent commercial maritime power for the 21st century,” Ranking Member Krishnamoorthi and Chairman John Moolenaar (R-MI) of the Select Committee said in the statement.
Below is a transcript of Ranking Member Krishnamoorthi’s testimony.
Thank you to the United States Trade Representative for convening a hearing on a matter of critical importance to United States national security and international economic competitiveness. I am proud to provide testimony today in support of robust action to support U.S. industry and workers and to combat the Chinese Communist Party’s (CCP’s) increasingly aggressive policies and practices to dominate the maritime, logistics, and shipbuilding sector. It is imperative that we implement strong remedies both to prevent continued unreasonable CCP dominance in shipbuilding but also adequately support the revitalization of our manufacturing base here in the United States, where the shipbuilding industry has historically been a source of well-paying, high-skill jobs vital to U.S. national security.
Just a few decades ago, the U.S. was the world’s top shipbuilder. But because of U.S. policy failures and aggressive non-market practices by the CCP, today the People’s Republic of China, or PRC, controls over 50 percent of the world’s shipbuilding market. By comparison, the U.S. share of global shipbuilding is just 0.2 percent. Moreover, USTR’s recent report tells us that the PRC is the largest shipowner with ownership of over 19 percent of all commercial ships globally and that PRC companies operate over a third of the global economy’s most important ports.
China’s control of global shipbuilding was not an accident. In fact, shipbuilding was one of the industries the CCP targeted in its “Made in China 2025” plan—where, you guessed it—it aimed to control half the global shipbuilding market by 2025, this very year.
Unfortunately, the CCP not only achieved this goal, it has exceeded it.
What does this mean for the United States? It means that in 2023, for every three-hundred and fifty-nine large oceangoing vessels China built, the United States built one. That’s not a typo. We’re building one.
And it means that our foremost adversary, the CCP, dominates an industry that is responsible for
transporting 95 percent of the cargo that enters the U.S. every year.
The CCP’s tactics have made it impossible to compete with their dominance, leading to under-investment in repair and manufacturing facilities, diminished ability to finance new operations, lost jobs, and lower wages here in the US. Analysis shows us that the CCP’s repressive labor practices alone have cost 727,000 U.S. jobs.
This control could be devastating for the U.S. economy in a potential conflict, where the CCP could use its control over global ports and the global shipping industry to cut off U.S. maritime commerce.
We cannot allow that to happen.
With a robust set of remedies, we have the opportunity to breathe new life into this industry. I am encouraged by USTR’s proposal and urge them to go further. This investigation presents a once-in-a-lifetime moment where we can decide whether we want to deepen our dependence on an adversary, creating further risk for U.S. economic and national security, or leverage U.S. trade law to its greatest extent to support a key U.S. industry.
Simply put, USTR’s proposed remedies are incomplete. Without direct support to revitalize shipbuilding, repair, maintenance, and component manufacturing, we will fall short of our goal to fully resuscitate this vital industry. Our government, at one time, recognized the importance of supporting shipbuilding capacity with the creation of the Construction Differential Subsidy program, a program that supported shipyards with the differential of constructing a ship here in the US versus outside of the US. While the program still exists in law, it has been defunded and sits idle. Proceeds from docking fees should be used to reinvigorate this fund and help U.S. shipbuilders get back on their feet. Additionally, docking fees could be used to build new capacity, invest in existing shipyard efficiency, or support workforce development. It is simply not enough to defend this industry from harmful actors as it has experienced severe deterioration. If we desire a meaningful U.S. shipbuilding sector, we must defend but also up our own game and invest in the industry to regain our independence and our identity as a great commercial maritime power for the 21st century.
I encourage USTR to explore every option to ensure U.S. shipbuilders have the requisite financial support.
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