By Sudarshan Varadhan
SINGAPORE (Reuters) – U.S. allies Japan and South Korea would struggle to quickly ramp up shipbuilding to meet U.S. demand for alternatives under President Donald Trump’s plan to impose port fees on China-linked ships, a top Japanese shipping executive said on Monday.
The Trump administration is drafting an executive order in a bid to revive domestic shipbuilding and weaken China’s grip on the industry.
Japanese shipbuilding is running near full capacity, with little scope for expansion until 2028, while shipbuilders in South Korea, as well as in the U.S., face financial challenges, said Takaya Soga, CEO of Nippon Yusen (NYK), Japan’s largest shipping line.
“The capacity of Japanese shipbuilding is almost full at the moment, until say 2028. So it is not so easy for them to increase the capacity,” Soga told Reuters on the sidelines of the Singapore Maritime Week conference.
Soga said expansion by South Korean shipbuilders was also not imminent, as they had “suffered from a very bad financial situation” for nearly two decades.
U.S. shipbuilders need both investment and technology to boost capacity, Soga said.
Trump’s order would establish a Maritime Security Trust Fund as a funding source and create shipbuilding incentives through tax credits, grants and loans, according to a draft fact sheet.
China, South Korea, and Japan account for 90% of global shipbuilding, according to the Center for Strategic and International Studies. Chinese shipbuilders have built their market share to more than 50% of merchant vessel cargo capacity, up from 5% in 1999, winning share from their Asian neighbours.
(Reporting by Sudarshan Varadhan; Editing by Sharon Singleton)
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