US Warns of Response to China's Unfair Competition in North Korean Shipping Industry... China Claims US Is Unfair

USTR Announces Results of Section 301 Investigation
"China's Dominance Increases Economic Security Risks"

The United States Trade Representative (USTR) has announced countermeasures, stating that China is unfairly competing in the shipbuilding and shipping industries, causing harm to the U.S. economy.

As the Biden administration approaches its end, the U.S. has been announcing measures to curb China in advanced sectors such as semiconductors daily. China has criticized these moves and announced retaliatory measures, creating a scenario where trade conflicts between the two countries are escalating even before the launch of the 'Trump 2.0' administration.

On the 16th (local time), USTR announced that after investigating China's actions in the maritime, logistics, and shipbuilding sectors under Section 301 of the Trade Act, it concluded that "China's efforts to dominate these sectors are unreasonable and impose burdens or restrictions on U.S. trade. Therefore, actions under Section 301 are actionable."

Section 301 of the Trade Act grants the U.S. government the authority to respond to foreign governments' unfair, unreasonable, or discriminatory acts, policies, or practices that restrict or burden U.S. trade.

After determining through investigation that a specific country is engaging in such behavior, USTR decides whether to take countermeasures and, if so, how to implement them to eliminate such actions.

USTR stated that the decision on countermeasures will be considered in the next phase of the investigation and is expected to be decided under the Donald Trump administration, which will take office on the 20th.

This investigation began on April 17 last year after five U.S. labor unions petitioned USTR for an investigation in March last year.

In this investigation, USTR assessed that China has targeted the maritime, logistics, and shipbuilding sectors for nearly 30 years and has largely achieved its goal of dominating these sectors.

According to USTR, China's global shipbuilding market share, which was less than 5% until 1999, rose to over 50% in 2023. As of last year, China owns more than 19% of the world's merchant fleet and controls 95% of global container production.

USTR concluded that through this, China has replaced foreign companies, deprived market-oriented companies and workers of commercial opportunities, reduced competition, increased dependence on China, thereby raising economic security risks and undermining supply chain resilience.

USTR claims that China's government-level policies, such as employing forced labor and using overproduced steel to unfairly lower costs and provide advantages to Chinese companies, have enabled this market dominance.

USTR Representative Katherine Tai stated that China "hinders fair and market-oriented competition, increases economic security risks, and is the greatest obstacle to the revitalization of U.S. industries and the communities dependent on those industries."

A spokesperson for China's Ministry of Commerce posted a statement on its website on the 17th, saying, "China notes that the Biden administration again sanctioned several Chinese companies on the 15th and released the Section 301 investigation report on China's maritime, logistics, and shipbuilding industries on the 16th. The Section 301 investigation clearly reflects unilateralism and protectionism, and China expresses strong dissatisfaction and firm opposition."

The spokesperson added, "China's industrial policies are primarily humanitarian rather than discriminatory and treat Chinese and foreign companies equally. In contrast, the Biden administration has provided massive subsidies to domestic industries through the Inflation Reduction Act (IRA) and the Chips Act, many of which are discriminatory subsidies. China is closely monitoring U.S. developments and will adopt necessary measures to safeguard its legitimate rights and interests."

Guo Zhaokun, spokesperson for China's Ministry of Foreign Affairs, also stated at a briefing, "As various U.S. studies show, the U.S. shipbuilding industry lost its competitive edge long ago due to excessive protection. China's industry development is the result of corporate technological innovation and active participation in market competition, supported by a complete industrial manufacturing system and a huge domestic market."