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President Donald Trump vowed to bring shipbuilding “home to America, where it belongs,” while promising tax incentives and a brand-new office in the executive branch to reinvigorate the industry in his joint address to Congress on Tuesday.
“To boost our defense industrial base, we are also going to resurrect the American shipbuilding industry, including commercial ship building and military shipbuilding,” Trump said during his nearly two-hour speech. “I’m announcing tonight that we will create a new office of shipbuilding in the White House and offer special tax incentives to bring this industry home to America, where it belongs. We used to make so many ships. We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact.”
Shipbuilding has emerged as a key theme for the second Trump administration. The president’s pick for Navy secretary, John Phelan, says Trump has texted him late at night about his rusty warship concerns.
The U.S. already builds ships domestically, but the number of manufacturers, shipyards, and suppliers has dwindled in recent decades—along with a skilled workforce—contributing to a significant backlog in production of warships and nuclear submarines.
Trump is hardly alone in his concern. Navalists have been sounding alarms for years, but the issue leapt to the fore in summer 2023, when a briefing slide prepared by the Office of Naval Intelligence reported that China’s shipyards can build around 232 times more tonnage than their U.S. counterparts.
The past year has seen the Navy and the Pentagon adopt unconventional approaches to kick shipbuilding into a higher gear. In July, DOD awarded an up-to-$2.4 billion contract to consulting firm Deloitte to help the nation’s two sub-building shipyards “reach and sustain a programmed production rate of 1+2 submarines per year.” Two months later, the Navy announced an up-to-$980.7 million contract to BlueForge Alliance, a two-year-old Texas-based nonprofit firm, for “planning, resourcing, coordinating, and uplifting the U.S. Submarine Industrial Base and Foreign Military Sales requirements.” Yet the Government Accountability Office just last week suggested the Navy still lacks “a strategy and coordinated leadership around its industrial base efforts.”
In December, a bipartisan group of Senators and representatives introduced a bill intended to boost U.S. shipbuilding. The SHIPS bill would be funded by a new maritime security trust fund, similar to the Highway Trust Fund and Aviation Trust Fund, to set aside money that doesn’t depend on the annual budget appropriations process.
In his address, Trump reiterated his intent to impose tariffs, which could affect domestic manufacturers—such as shipbuilders—that import materials like steel. He asked for a little patience.
“Tariffs are about making America rich again and making America great again,” said Trump, espousing a view held by few economists, and judging by the day’s stock selloff, few investors. “And it’s happening, and it will happen rather quickly. There’ll be a little disturbance, but we’re OK with that.”
Previously announced reciprocal tariffs are expected to take effect April 2, he said.
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