Can the U.S. Outbuild China’s Navy? Trump’s $30B Gamble Faces Rough Waters

Team Veye | 08-Jul-2025

President Trump’s latest executive order to rebuild American shipbuilding signals a dramatic escalation in Washington’s economic rivalry with Beijing. By launching the new Maritime and Industrial Capacity Directorate and calling for a multi-agency maritime strategy, Trump has laid out an aggressive plan to catch up with China’s vast naval and commercial shipbuilding capabilities. But is it too little, too late?

A Big Vision with a Shallow Wallet

Trump’s directive sets a broad agenda: reshaping ship procurement processes, expanding port infrastructure, offering financial incentives, and tightening trade restrictions on Chinese maritime goods. From prioritising modular vessel construction to calling on allies for support, it’s a playbook for national maritime revival.

But execution is the real test. The Defense Production Act and other tools offer funding avenues, yet even with maximum utilisation, experts say the U.S. may only unlock about $1 billion this year roughly the cost of upgrading one major shipyard. That won’t turn the tide in an industry where China is already a generation ahead.

The Reconciliation Bill: A Financial Lifeline or False Hope?

To bolster his plan, Trump backed a $150 billion defense reconciliation package, carving out $30 billion for shipbuilding and shipyard upgrades. It’s the largest defense-specific commitment in the bill and includes money for modernisation and unmanned naval platforms.

Still, this represents a budget cut compared to previous years. Biden’s FY2025 budget had earmarked over $37 billion for shipbuilding alone. The sharp decline in Trump’s base request, relying heavily on the reconciliation fund, drew criticism from lawmakers who say short-term infusions can’t substitute sustained funding.

China’s Lead: Built Over Years, Not Months

The numbers highlight the gap. In 2024, U.S. shipyards launched just five large commercial vessels. China, by contrast, delivered over 250 ships totaling 14 million gross tonnes. That’s more than the total U.S. output since World War II.

China now controls over 50% of global shipbuilding. Its navy has more than 370 ships, including advanced destroyers and submarines. The U.S. Navy, meanwhile, fields fewer than 300 ships. Experts warn this gap will widen unless American capacity is rapidly expanded a tall order given how slow domestic yards are to modernise.

Turning to Allies: The Strategic Shortcut?

Recognising domestic limitations, the U.S. is looking to allies like South Korea and Japan to help fill the gap. South Korea’s Hanwha Ocean recently acquired Philly Shipyard and has started performing maintenance on U.S. naval vessels. Japan, too, has been approached for collaboration in building and repairing American ships in the Indo-Pacific region.

While promising, this approach has hurdles. U.S. shipbuilders may push back against foreign competition, and regulatory barriers still restrict co-production of critical military assets. Political resistance to outsourcing naval contracts could limit what these alliances can achieve in practice.

Is Outbuilding China Even Necessary?

Some U.S. defense analysts argue that matching China ship-for-ship is unrealistic and unnecessary. The U.S. still leads in high-end systems like nuclear submarines, aircraft carriers, and long-range missiles. Instead of trying to win a numbers game, Washington may focus on innovation such as unmanned systems, AI-driven vessels, and advanced radar technologies.

Final Word

Trump’s $30 billion push to revive American shipbuilding is the most significant industrial policy move in decades. It’s bold, sweeping, and packed with patriotic energy. But success will depend not just on money or strategy it hinges on whether the U.S. can break through decades of red tape, revitalise a dwindling workforce, and move with the urgency that the geopolitical moment demands.

China has already built momentum. For America, the real battle is not just at sea, but within its own system.

Disclaimer

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