China's Massive Shipbuilding Sector in U.S. Crosshairs: How Can it Weather the Storm? (AI Translation)
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文｜财新周刊 李蓉茜 杜知航
By Caixin Weekly's Li Rongqian and Du Zhihang
时隔七年，美国再次向中国发起“301调查”，这次主要针对中国年出口额逾2000亿元、全球市占率超50%的造船业。
Seven years after its last action, the U.S. has launched another Section 301 investigation, this time targeting China's shipbuilding industry, which boasts an annual export value of over 200 billion yuan and accounts for more than 50% of the global market share.
美国时间4月17日，美国贸易代表（USTR）宣布，在对五个全国性工会提交的请愿书进行审查后，决定按美国《1974年贸易法》第301条，对中国在海事装备、物流及造船领域的行为、政策和做法（acts，policies，and practices）启动调查，并将于5月29日就该调查举行公开听证会。
On April 17, U.S. time, the United States Trade Representative (USTR) announced that after reviewing petitions submitted by five national unions, it has decided to initiate an investigation into China's actions, policies, and practices in the maritime equipment, logistics, and shipbuilding sectors under Section 301 of the Trade Act of 1974. A public hearing on this investigation is scheduled for May 29.
这是拜登政府自2021年上台以来，首次对中国具体行业采取“301调查”。根据美国商务部国际贸易署（ITA）的解释，“301 条款”赋予美国执行贸易协定、解决贸易争端并为美国商品和服务打开外国市场的权力。当调查发现外国存在违反贸易协定或其他不公平的贸易行为，美国可施加贸易制裁，包括制定“报复性关税列表”（retaliation list），对列表上的贸易产品施加关税，以减少对美国消费者、企业和工人的伤害。
This marks the first time the Biden administration has initiated a "Section 301 investigation" into a specific Chinese industry since taking office in 2021. According to the U.S. Department of Commerce's International Trade Administration (ITA), Section 301 grants the United States the authority to enforce trade agreements, resolve trade disputes, and open foreign markets for U.S. goods and services. Should the investigation reveal that a foreign country is violating trade agreements or engaging in other unfair trade practices, the U.S. can impose trade sanctions, including creating a "retaliation list" of tariffs on listed trade products to mitigate harm to American consumers, businesses, and workers.
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- The U.S. has initiated a "301 investigation" into China's shipbuilding industry, which exports over 200 billion yuan annually and holds more than 50% of the global market share. This marks the first specific industry investigation by the Biden administration since 2021, following a petition from five national unions.
- President Biden expressed strong support for imposing higher tariffs on Chinese steel and aluminum if unfair trade practices are confirmed in ongoing investigations. He emphasized the importance of the shipbuilding industry to national security, including naval strength.
- The last "301 investigation" against China was during President Trump's tenure, leading to tariffs on various Chinese products including steel and aluminum. The current investigation could lead to trade sanctions such as retaliatory tariffs if unfair trade practices are found.
The U.S. has initiated a new Section 301 investigation into China's shipbuilding industry, which is significant in the global market with over 50% share and an annual export value exceeding 200 billion yuan. This investigation, announced by the USTR on April 17, follows petitions from five national unions and marks the first such inquiry under the Biden administration targeting a specific Chinese sector [para. 1].
President Joe Biden emphasized the importance of this sector to national security at a rally in Pittsburgh, indicating potential tariff increases on Chinese steel and aluminum if unfair practices are confirmed. This stance continues from actions taken during Trump's administration, which also imposed tariffs following a Section 301 investigation started in August 2017 [para. 2][para. 3].
China's response to these investigations has been critical, especially after a WTO ruling in September 2020 found U.S. tariffs violated international obligations. The Chinese Ministry of Commerce has accused the U.S. of distorting trade for political purposes and urged adherence to multilateral trading rules [para. 4].
Amidst these tensions, the U.S. is also scrutinizing other sectors like steel and aluminum for forced technology transfers, with China being a major global producer with significantly lower export prices than the U.S. This scrutiny extends beyond tariffs as seen with recent legislative actions against TikTok, reflecting broader concerns over security and competitiveness in critical technology areas [para. 5][para. 6].
The focus on shipbuilding is part of wider strategic measures by the U.S., including enhancing maritime cyber threat responses and imposing network risk management directives on Chinese-made port machinery due to potential remote control risks posed by such equipment at U.S. ports [para. 7].
Chinese shipbuilders have expressed concerns but noted limited direct impact from potential U.S. tariffs due to their primary markets being outside the United States. However, broader implications involve logistics platforms like Logink, which could face restrictions impacting global shipping operations if targeted by U.S. actions [para. 8].
This ongoing dispute reflects deeper geopolitical tensions between China and the U.S., where trade measures are increasingly used as tools for broader strategic objectives. This dynamic complicates economic relations and highlights challenges in managing competition within crucial industrial sectors amid global technological advancements and security concerns [para. 9].
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- Shanghai Zhenhua Heavy Industries Co., Ltd.
上海振华重工（集团）股份有限公司 - Shanghai Zhenhua Heavy Industries Co., Ltd. (ZPMC), a major global port machinery manufacturer, holds over 70% of the global market share. The company has faced scrutiny from U.S. lawmakers over cybersecurity concerns related to its port machinery, particularly regarding cellular modems potentially embedded in their equipment. Despite these allegations, ZPMC maintains that its products meet international standards and denies any wrongdoing.
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