[Text/Observer Network Liu Chenghui] Imposing taxes on ships built in China entering US ports is one of the tricks used by the US government to suppress China. A May 16 analysis article published by Hong Kong-based English-language media South China Morning Post pointed out that this move by the US government may cause some orders to be lost for China's shipbuilding industry, while South Korea's shipbuilding industry might benefit from it. Industry insiders also stated that China has unique competitive advantages in terms of shipbuilding efficiency, cost, price, and supply chain integration, making it difficult for China's shipbuilding industry's resilience and dominant position to be easily shaken.

Industry insiders further noted that South Korean shipyards face capacity constraints and labor shortages, and during trade negotiations with the US, South Korea hopes to list shipbuilding as a key cooperation area to alleviate bilateral trade imbalances, which may help the US rebuild its shipbuilding capabilities, casting a shadow over the long-term prospects of South Korean shipbuilders.

The US Trade Representative Office released a Federal Register notice last month, stating that all vessels built in China and owned by Chinese entities will be subject to charges based on the amount of cargo they carry when docking at US ports. These charging measures will be officially implemented 180 days later, carried out in two phases.

The article pointed out that as the turbulence in Sino-US trade relations triggers a chain reaction in the global shipbuilding industry, South Korean shipyards may expect to gain substantial new orders, but industry observers said that competition from China will remain strong.

Professor Zeng Ji from the Ocean Science and Engineering College of Shanghai Maritime University said, "Some Chinese shipbuilding companies may face the situation where hard-won orders are taken away by (South Korean competitors)."

On May 2, 2025, a bustling scene was seen inside the shipyard of Nantong Xiangyu Marine Equipment Co., Ltd. in Tongzhou District, Nantong City, Jiangsu Province. Workers were busy manufacturing ship orders. Visual China.

As another major global shipbuilder, South Korea has seen rising profits and sales performance for its shipyards. Hyundai Heavy Industries Group reported strong first-quarter performance with a year-over-year increase of 436% in operating profit, reaching 85.92 billion won (approximately 194 won equals 1 RMB), with quarterly sales amounting to 6.7 trillion won, up 22%; Samsung Heavy Industries saw a tenfold increase in net profit in the first quarter, reaching 90.1 billion won, with operating profit increasing to 123.1 billion won; Hanwha Ocean recorded net income of 21.57 billion won in the first quarter, an increase of 323% year-on-year.

A researcher from a ship navigation and communication equipment manufacturer in Busan who wished to remain anonymous said that current inquiries have significantly increased, and some new orders are currently being discussed with South Korean enterprises. "The high port fees imposed by the US on Chinese ships and the US Shipbuilding Act and other measures will push more American customers to turn to South Korea." He implied that these benefits will become more evident in the long term.

However, Professor Zeng Ji also stated that China's shipbuilding industry's resilience and dominant position are not easily shaken.

"China's competitive advantages in efficiency, cost, price, and supply chain integration remain unchanged. My judgment is that some orders may flow to South Korea, but the number is unlikely to be significant. China has the ability to withstand pressure. Considering South Korea's restrictive factors, whether South Korea can obtain substantive benefits remains to be observed," Zeng Ji said.

According to statistics from UK shipping data provider Clarkson Research, Chinese shipbuilders secured 9.451 million deadweight tons of orders in the first quarter, accounting for more than half of the global total, with South Korea's share at 35.4%. Last year, China secured 70% of global orders, while South Korean shipbuilders accounted for only 17%.

Professor Zeng Ji stated that South Korean shipyards face obstacles in rapidly expanding their scale to meet new demands and also deal with labor shortages.

He said, "China also faces some capacity constraints, but good production management is also part of competitiveness. Orders will go to those who can quickly build ships."

The article argued that although the US plans to have naval vessels repaired by South Korean shipyards, which may benefit the South Korean shipbuilding industry, during recent trade negotiations, South Korea hopes to list shipbuilding as a key cooperation area that may alleviate bilateral trade imbalances, which may cast a shadow over the long-term prospects of South Korean shipyards.

Last week, during his visit to South Korea, US Trade Representative Greer met with relevant personnel from the South Korean shipbuilding industry to discuss in-depth issues such as the reconstruction of the US shipbuilding industry, supply chain restructuring, and technological cooperation.

In his meeting with representatives from Hanwha Ocean, both sides discussed solutions to enhance the competitiveness of the US shipbuilding industry. Hanwha Ocean plans to transplant its intelligent production system into the US Phil Shipyard acquired last December.

A South Korean representative said, "Hanwha Ocean hopes to become a strategic partner in the revival of the US shipbuilding industry, not only conducting technology transfers and building production infrastructure but also jointly achieving the rebirth of the US shipbuilding industry."

Previous articles in the South China Morning Post also mentioned that the US's provocations against China in the shipbuilding industry may backfire because China occupies more than half of the global shipbuilding market share, making it extremely difficult to find alternatives to China. It is unlikely that the US's Asian allies, Japan and South Korea, can fill the resulting production gap. Additionally, the port fee plan faces challenges in implementation, with analysts taking a cautious stance.

"There is no doubt that in the future, global shipping companies will tend to choose ships from South Korea and Japan to mitigate risks," said Xu Tianchen, a senior economist at the Economist Intelligence Unit. "But it will be difficult to find alternative solutions in the short term because China accounts for more than half of the global ship production market share."

"Building a container ship takes more than a year. Who knows what will happen then?" he said.

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Original source: https://www.toutiao.com/article/7505318363221082660/

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