US to Push Trade Sanctions on Chinese Shipbuilding Industry... "Korean and Japanese Shipbuilding Industries Benefit"

There is an analysis that South Korean and Japanese shipbuilders could benefit from the United States' moves to curb China's shipbuilding industry.

According to the British daily Financial Times (FT) on the 5th (local time), the U.S. Trade Representative (USTR) began an investigation last month under Section 301 of the Trade Act targeting China's "unfair trade practices" in the marine, logistics, and shipbuilding sectors.

Section 301 of the Trade Act is an economic security law that allows the U.S. government to impose sanctions on imports if trade barriers are identified after investigating another country's trade practices or policies.

If the U.S. imposes tariffs on Chinese-made vessels entering U.S. ports in the future, demand for Chinese ships will inevitably decrease. Accordingly, this trade investigation is also seen as a measure to revive the U.S. shipbuilding industry, which was the world's number one in ship production capacity in the 1970s but now produces less than 1% of the world's commercial vessels.

However, analysts dismissed expectations that the U.S. shipbuilding industry could increase its market share as "nonsense."

Stuart Nichol, director of global shipping analysis firm MSI, explained, "Although it is difficult to compare shipyards, shipbuilding in the U.S. generally costs three to four times more than in other regions."

Rob Wilmington, a market expert at maritime information company Lloyd's List, also predicted that it would be difficult for the U.S. to re-enter the market, saying, "China has invested huge funds in building new shipyards capable of very efficient shipbuilding," and that China also has cheap and skilled labor.

Chinese shipbuilders, led by the state-owned China State Shipbuilding Corporation (CSSC) and its subsidiaries, accounted for about 46% of the global shipbuilding market as of last year.

South Korea's market share closely follows at 41%.

Korean companies such as Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean are focusing on orders for liquefied natural gas (LNG) carriers and carbon-reducing eco-friendly ships.

According to data from consulting firms like Redal, the total order amount for Korean companies in the first quarter of this year was $13.6 billion (about 18.5 trillion won), a 41.1% increase compared to the same period last year. This exceeds China's growth rate (8.6%) and order amount ($12.6 billion, about 17.2 trillion won) during the same period.

Japanese companies such as Imabari Shipbuilding and Japan Marine United account for about 10% of global orders, and some shipyards have started developing advanced technology vessels such as low-carbon ships.

Koon Chao, vice president of Redal, predicted that South Korea and Japan could benefit from U.S. port fees imposed on Chinese-made ships.

However, he added that since imposing taxes would also increase costs for U.S. consumers, it would be a very delicate measure for the U.S. to implement.