On March 4, President Donald Trump delivered his first joint address to Congress to discuss his achievements at the start of his second administration, his campaign promises and forward-looking policy goals. During the address, President Trump announced plans to create an office within the National Security Council (NSC) dedicated to strengthening the U.S. maritime industrial base and leading a whole-of-government effort through the departments of Homeland Security (DHS), Defense (DOD), Commerce, State, Transportation (DOT), and the U.S. Trade Representative (USTR). Trump’s decision to create a new office in the NSC focused on shipbuilding supports his goal to “bring this industry home to America, where it belongs.”
Increasing U.S. shipbuilding capacity is also a key aspect of Trump’s counter-China plan. China has established itself as a dominant shipbuilding power, building a massive number of ships for both its naval and commercial sectors as a component of its “military-civil fusion” strategy.
The issue of U.S. shipbuilding is a personal priority of National Security Advisor (NSA) Mike Waltz. When NSA Waltz was a representative for Florida, he worked with Sen. Mark Kelly (D-AZ) to introduce the “Ships for America Act of 2024” (S.5611/H.R.10493). Waltz and Sen. Kelly aimed to revitalize U.S. shipbuilding and the American maritime fleet to counter economic and security risks caused by a declining U.S. maritime industry. They began drafting the legislation with then-Sen. Marco Rubio (R-FL) and Rep. John Garamendi (D-CA) during and after Sens. Kelly and Rubio and Reps. Waltz and Garamendi published the Congressional Guidance for National Maritime Strategy in May 2024. This bill reflects the recommendation in that report and incentivizes domestic shipbuilding, creates regulatory reforms and provides financial support to U.S.-flagged vessels. The Ships for America Act of 2024 was officially introduced after the election in December 2024 by Sen. Kelly and Rep. Trent Kelly (R-MS) with Sen. Todd Young (R-IN) and Rep. Garamendi, respectively.
The client alert below will primarily focus on the defense implications of the Trump administration’s plan to establish an office of maritime security and the Maritime Security Trust Fund. We will also discuss Congress’ interest in U.S. shipbuilding capacity, especially in the defense space. President Trump’s plans to increase shipbuilding capacity will also impact commercial shipbuilding and trade.
President Trump’s Executive Order
On April 9, President Trump signed an Executive Order (E.O.), “Restoring America’s Maritime Dominance,” which reflects his interest in increasing U.S. shipbuilding capacity and conducting a review of naval programs. The E.O. directs the assistant to the president for national security affairs with the secretaries of State, Defense, Commerce, Labor, Transportation and Homeland Security with the U.S. trade representative (USTR) to submit a Maritime Action Plan (MAP) to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity. The secretary of Defense is directed to review available authorities and resources, such as the Defense Production Act Title III authorities, to invest in and expand the Maritime Industrial Base, while the secretaries of Commerce, Transportation, and Homeland Security are directed to review key maritime components in the supply chain; ensure public and private investments are derived in consultation with the assistant to the president for economic policy; and the recommendations take into consideration projected increases to commercial and defense capabilities.
As members of the administration are evaluating top components of the shipbuilding industry and creating the MAP, President Trump’s E.O. directed the Department of Government Efficiency (DOGE) to begin a separate review of the departments of Defense and Homeland Security vessel procurement processes. DOGE will then provide the president with a proposal to include in the MAP to improve efficiency and effectiveness of existing processes.
The E.O. also highlights concerns with China’s “unfair targeting of maritime, logistics, and shipbuilding sectors,” and directs the USTR to coordinate with agencies to collect additional information to support administrating actions related to the public hearing titled “Proposed Action in Section 301 Investigation of the PRC’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance, 90 Fed. Reg. 10843 (February 27, 2025)”; take appropriate steps in accordance with the attorney general and secretary of homeland security to enforce restrictions, fees, penalties or duties; consider imposing tariffs on ship-to-shore cranes manufactured with Chinese components or by a company influenced by a Chinese national; and imposing tariffs on cargo handling equipment.
President Trump also proposed the introduction of new legislation aimed at preventing cargo carriers from circumventing the Harbor Maintenance Fee on imported goods by making port in Mexico and Canada and sending goods to the United States through land borders. The E.O. permits the secretary of Homeland Security to require all foreign-origin cargo arriving by vessel to be subject to all applicable charges as well as an additional 10% service fee for additional costs to the Customs and Border Protection (CBP). There are also a variety of other provisions aimed at expanding Arctic naval security, establishing maritime prosperity zones, evaluating maritime industry needs, increasing mariner training and education, modernizing the U.S. Merchant Marine Academy, improving procurement and other issues related to the defense and commercial components of the maritime industry.
Navy Shipbuilding Issues
The Navy has been struggling with shipbuilding capacity for decades. A review done during the Biden administration under former Navy Secretary Carlos Del Toro concluded that most of the Navy’s major shipbuilding programs are running behind schedule, including the first Columbia-class submarine, the new block of the Virginia-class submarine, the USS Enterprise aircraft carrier and the first Constellation-class frigate.
As a result, the Navy has fallen below its goal for battle force ships, with fewer than 300 total ships, which limits naval readiness and the Navy’s ability to maintain a global presence. In 2023, the Navy released an updated force-structure goal and, as part of the FY25 shipbuilding plan for the next 30 years, the Navy announced its plans to achieve and maintain 381 manned ships. The Navy’s FY25 budget request also included plans to acquire 134 large, unmanned surface and underwater vehicles. As part of the FY25 proposal, the Navy requested $32.4 billion in shipbuilding funding for the procurement of six new ships.
Naval leaders and members of Congress have regularly expressed concern about the impact of workforce shortages, maintenance delays and costs, the limited availability of spare parts and other industrial constraints and budgeting issues.
Appropriations/Funding
The costs of shipbuilding have skyrocketed, and according to the Congressional Research Service, the Navy’s 2025 plan for new-ship construction would be $35.8 billion per year, and the total average costs for shipbuilding over the next 30 years would be 46% more than the average congressional appropriations. Costs have risen for a range of reasons, including complex and difficult builds, design complexity and unrealistically low costs in previous shipbuilding plans.
In his joint address to Congress, President Trump sought to increase funding for the sector as Congress drafted a stopgap bill for government funding. The FY25 continuing resolution (CR) included funding for guided-missile destroyers by $1.54 billion, the Columbia-class ballistic missile submarine program by $23.6 million, and roughly $2.39 billion to help compete prior-year shipbuilding programs and help deliver nearly completed ships. Overall, the CR created a budget of roughly $33.33 billion for shipbuilding and conversion to ensure continuity in critical shipbuilding programs, address issues for incomplete projects, and prioritize certain programs, such as destroyers or submarines, over others like frigates and carriers.
President Trump’s recent E.O. also establishes the launch of a Maritime Security Trust Fund that will be outlined in the MAP, as well as a financial incentive program designed by the secretary of Transportation to incentivize private investment in the construction of commercial components, parts and vessels; improvements to shipyards, repair facilities and drydocks; and Federal Credit Reform Act-compliant loans and loan guarantees.
Departments of Defense and Navy
Senior political nominees in the previous Biden and Trump administrations have supported increased funding for shipbuilding. For example, former Secretary of the Navy Carlos Del Toro said the Navy should have replaced its amphibious fleet sooner, highlighting how nearly half are in poor condition and extended deployments of the fleet strain readiness. Del Toro previously planned to use $6 billion to extend the life of 12 Arleigh Burke-battle force destroyers, but his plan was not executed due to delays and cost overruns that have plagued the shipbuilding industry.
Secretary of the Navy John Phelan made it clear during his nomination hearing with the Senate Armed Services Committee (SASC) on Feb. 27 that one of his main priorities will be strengthening the Navy’s capabilities through shipbuilding and the defense industrial base. He noted that every delay, maintenance backlog and inefficiency within the sector only provides an opportunity for U.S. adversaries to challenge the United States. Secretary Phelan also affirmed statements made by President Trump about the importance of the shipbuilding sector and discussed plans to visit shipyards, increase private sector investment and establish clear training programs to create a skilled workforce to prop up a career in shipbuilding. Phelan also said he believes President Trump selected him to be the secretary of the Navy to highlight the urgency of the situation and to stress the importance of shipbuilding to U.S. national security.
Congress
Members of Congress in both the House and Senate have also been focused on the shipbuilding sector. In the Senate, during Phelan’s nomination hearing to be secretary of the Navy on Feb. 27, the Senate Armed Services Committee (SASC) members raised issues related to shipbuilding and submarines, as well as personnel challenges and modernization, issues related to government efficiency and the Navy’s budget, and potential broadband challenges. For example, Chairman Roger Wicker (R-MS) discussed his concerns with the Navy’s budget, which he believes has caused delays in technological installations and shipbuilding. Ranking Member Jack Reed (D-RI) emphasized the importance of U.S. naval vessels for security in the Red Sea and the Middle East to support Israel, as well as the expectation that the Navy will likely face challenges as it tries to compete with China’s rapidly growing naval capabilities.
Senators also discussed their shipbuilding priorities during the SASC Subcommittee on Seapower hearing titled “The State of Conventional Surface Shipbuilding” on March 25. Subcommittee Chairman Rick Scott (R-FL) highlighted how current shipbuilding programs are failing to meet their goals, which Ranking Member Tim Kaine (D-VA) added is impacting naval readiness and creating a degraded naval industrial base. Members of the subcommittee expressed their concern about the challenges facing U.S. shipbuilding capacity and focused on solutions to enhance the naval industrial base, including recommendations from the Government Accountability Office (GAO). Some members, such as Sen. Angus King (I-ME), asked about the development of specific naval programs, such as the Next-Generation Guided-Missile Destroyer program DDG-X, as well as potential collaboration opportunities between the Navy and the private sector. On April 8, the SASC Subcommittee on Seapower also reviewed key priorities regarding the state of nuclear shipbuilding, the availability of nuclear warships and opportunities for growth. Chairman Scott, Ranking Member Kaine and other members of the committee reiterated their concerns about the state of U.S. shipbuilding and its shortcomings, as well as workforce shortages in the Navy. The hearing also reviewed opportunities for reform to increase production to compete against the Chinese Communist Party’s monopoly. Ranking Member Kaine even suggested collaboration with AUKUS members and other allies in the Indo-Pacific to increase submarine production.
The House Armed Services Committee (HASC) highlighted their priorities during the Subcommittee on Seapower and Projection Forces hearing, “The State of U.S. Shipbuilding,” on March 11, which focused on challenges to the U.S. naval and shipbuilding industrial base, concerns about workforce shortages and labor incentives. Subcommittee Chairman Trent Kelly (R-MS), the original lead sponsor of the Ships for America Act, highlighted the legislation and discussed how the Trump administration’s plan to revitalize the U.S. shipbuilding industry will resolve “decades of discrepancy within the industry.” Chairman Kelly also committed to reintroducing his shipbuilding legislation during the 119th Congress. Other members during the hearing discussed plans to incentivize shipbuilding as a career path, potential considerations to bolster the military sealift command fleet through the use of allied partners, and recommendations to improve ship design and procurement.
In addition to the Ships for America Act of 2024, Sens. Mike Lee (R-UT) and John Curtis (R-UT) introduced legislation to improve Navy and Coast Guard readiness and the shipbuilding industry. The Lee-Curtis bills, “Ensuring Naval Readiness Act” and “Ensuring Coast Guard Readiness Act,” aim to modernize and expedite the construction and procurement processes for U.S. maritime forces while increasing collaboration with U.S. allied forces. The legislation also supports President Trump’s push for U.S. allies to become more involved in the U.S. shipbuilding process.
Next Steps
As the Trump administration, through the NSC, DOD, Navy and Congress work to implement their plan to improve U.S. shipbuilding and maritime security, there are four key questions moving forward: 1) the impact of tariffs, 2) collaboration with international allies, 3) plans to increase and develop a skilled workforce dedicated to shipbuilding, and 4) how Congress will approach appropriating defense spending to prioritize shipbuilding.
Tariffs
The Trump administration has imposed tariffs on the steel and aluminum industries, which are key components to the manufacture of certain components necessary to the assembly of ships. President Trump’s tariff policy is also ever evolving after his Liberation Day announcements and planned pause on certain tariff programs. Will the Trump administration’s tariffs impact attempts to manufacture ships domestically? Will the tariffs impact President Trump’s proposals to have U.S. allies manufacture the ships? How will the tariffs impact the importation of certain components needed for ship manufacturing that are only available outside the United States? Will the tariffs and President Trump’s proposed port fee also have an impact on shipbuilding and pricing?
U.S. Collaboration with International Allies
President Trump’s E.O. and other efforts focused on shipbuilding also propose deeper collaboration with international allies. How will U.S. allies be involved in the process? Will shipbuilding only occur domestically and allies only help with necessary repairs? Will certain allies be willing to cooperate, especially with European attempts to become more self-sufficient in defense and the Trump administration’s tariffs on imported goods?
Shipbuilding Workforce
Secretary Phelan also discussed the concern of a proper and competitive workforce to manufacture the complicated and necessary components needed to increase maritime security and readiness. There is also an increased interest from the international community to invest in the naval and shipbuilding sector. Will private sector investment help create enough incentive to make the industry competitive enough? Will the United States have to choose cooperation with allies over domestic manufacturing due to a lack of a proper workforce? How will the United States balance the Trump administration’s “America First” priorities with its desire to collaborate with allies on ship-building initiatives?
Congressional Actions
Since the start of the 119th Congress, some members have already begun to conduct oversight and discuss plans for future shipbuilding efforts. For example, members with a shipbuilding presence within their districts, such as SASC Chairman Roger Wicker (R-MS) and Ranking Member Jack Reed (D-RI), are likely preparing policy priorities for the industry in preparation for the series of must-pass legislative efforts this year. The reconciliation process is also expected to focus on an increase of defense spending and border security issues, which is likely to contain some level of mandatory spending for maritime security- or naval readiness-related issues. The House and Senate will also write the annual National Defense Authorization Act, which often includes proposals for shipbuilding and maritime security-related measures. Congress will also have the opportunity to provide funding for President Trump’s proposed Maritime Security Trust Fund, which could vary from tax incentives to grants or loans.
How will Congress appropriate defense spending for FY26 appropriations? Will the Ships for America Act be reintroduced? How will Congress respond to programs for U.S. ally participation in shipbuilding efforts?
