Japan, South Korea Would Struggle To Fill U.S. Demand For Non-China Ships

US allies Japan and South Korea would struggle to quickly ramp up shipbuilding to meet US demand for alternatives under President Donald Trump’s plan to impose port fees on China-linked ships, a top Japanese shipping executive said, Sudarshan Varadhan reported for Reuters.

Japanese shipbuilding is already operating near full capacity while shipbuilders in South Korea and the US are grappling with financial difficulties. I Photo: SarahTz Wikimedia Commons

The Trump administration is drafting an executive order aimed at reviving domestic shipbuilding and reducing China’s dominance in the industry.

However, Japanese shipbuilding is already operating near full capacity, with little room for expansion before 2028. Meanwhile, shipbuilders in South Korea and the US are grappling with financial difficulties, said Takaya Soga, CEO of Nippon Yusen (NYK), Japan’s largest shipping line.

China, South Korea, and Japan account for 90% of global shipbuilding, according to the Center for Strategic and International Studies (CSIS). Chinese shipbuilders have grown their market share to over 50% of global merchant vessel cargo capacity, up from just 5% in 1999, gaining ground from their Asian neighbors.

“The capacity of Japanese shipbuilding is almost full at the moment, until, say, 2028. So it is not so easy for them to increase capacity,” Soga told Reuters on the sidelines of the Singapore Maritime Week conference.

Soga added that expansion by South Korean shipbuilders was also not imminent, as they had “suffered from a very bad financial situation” for nearly two decades.

US shipbuilders, he noted, need both investment and technological advancements to boost production. Trump’s executive order would establish a Maritime Security Trust Fund (MSTF) as a funding source and create shipbuilding incentives through tax credits, grants, and loans, according to a draft fact sheet.