Biden promise to rival China on shipbuilding faces a big economic problem
Publishing timestamp: 2024-04-25 08:32:42
Summary
Biden administration is looking to boost the U.S. steel industry by investigating Chinese shipbuilding, but analysts say that bringing shipbuilding back to the U.S. is not economically viable due to high costs and lack of demand. The U.S. lacks economies of scale and faces stiff competition from Asian countries like China, Japan, and South Korea. The cost of U.S.-made vessels is significantly higher than foreign-made vessels, making it difficult for domestic shipbuilding to be competitive globally. The majority of U.S. shipbuilding is focused on military contracts, and without subsidies and demand, there is no commercial case to build vessels. Biden's plan to increase the size of the U.S. Navy could potentially boost shipbuilding, but there are concerns about the administration's defense budget aligning with the Navy's shipbuilding goals.
Sentiment: NEUTRAL
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