Command of the sea: can Trump make America build ships again?

Once a year, the Polar Star slips out of her homeport in Seattle. For almost 16,000 miles, her journey south will be uneventful. But when she reaches the Antarctic Circle, the ship will confront an ice sheet that can be up to six metres thick. The Polar Star must smash her way through.

As the engines of the 49-year-old vessel creak and strain with exertion, a cargo ship follows in her wake, bringing supplies to McMurdo Station and Scott Base so polar scientists can survive the Antarctic winter.

The annual ‘Operation Deep Freeze’ is one of the world’s great feats of maritime endeavour. But the Stars and Stripes is a rare sight in icy waters of the Arctic and Antarctic. The Polar Star is the only operational heavy icebreaker that the United States Coast Guard possesses.

“The US has a very small fleet of icebreakers, one heavy and two medium, and they’re old and really spend a lot of time in maintenance,” says Cynthia Cook, director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies (CSIS). “We have relatively few — fewer than we need.”

Donald Trump agrees. The US president plans to order 48 icebreakers to help dramatically expand the US presence in the increasingly contested polar regions. Russia already has world-leading icebreaker capabilities, while China is taking a growing interest in the Arctic and its mineral riches.

But no American shipyard has built a heavy icebreaker in decades. A programme to construct three such vessels, known as Polar Security Cutters, was approved in Mr Trump’s first term, but is years behind schedule and significantly over budget.  

This reflects a much wider malaise in American shipbuilding. The US built 5% of the world’s ocean-going commercial ships in the 1970s. Today, the figure is 0.1%. The protectionist Jones Act of 1920, which requires vessels sailing between US ports to be built domestically, has done little to help US shipbuilding remain globally significant.

Challenging China

China, meanwhile, has built an astonishing lead in the race for shipbuilding dominance. Chinese shipyards, buoyed by heavy subsidies, now turn out more than half of the world’s merchant vessels. According to the CSIS, the state-owned China State Shipbuilding Corporation alone produced twice the shipping tonnage in 2024 than the United States has built in total since the second world war.

The situation is giving American strategists sleepless nights. “If you look back through history, there’s never really been a leading power that did not have maritime strength,” warns Mark Kennedy, director of the Wahba Institute for Strategic Competition at the Wilson Center think tank. American shipbuilding weakness is a matter of “grave concern”, he says.

Carrot and stick efforts to revive US shipbuilding are beginning to take shape. The Trump administration is threatening to impose levies on shipping companies that have ordered vessels from China. At the same time, Congress is considering legislation that would offer powerful incentives for companies to invest in US shipbuilding. 

But as they approach the massive task of rebuilding America’s maritime strength, policymakers face uncomfortable choices. Do they prioritise ships, or shipbuilding? The fastest way to acquire new vessels is to order from allied countries such as South Korea and Japan, which boast the strongest shipbuilding industries outside China. Investing in domestic shipbuilding, by contrast, would create far more jobs and help restore the country’s industrial base, but would take much longer to accomplish.

How the administration resolves this dilemma will have drastic implications for global trade and geopolitics.

Breaking the ice

As the US begins the journey towards reviving its shipbuilding industry, icebreakers are top of the to-do list. 

In the icebreaker industry, however, it is not China that occupies top position — but Finland. The Nordic nation’s prowess with icebreakers is perhaps not surprising, given that its ports freeze solid each winter. Today, Finland designs 80% of the world’s icebreakers and builds more than 60%.

The sudden surge in US interest in icebreakers could therefore provide an enormous boon for Finnish industry.

“I have never seen this level of interest in icebreakers globally,” says Mika Hovilainen, CEO of Aker Arctic, a Finnish company that designs and tests icebreakers. It is a time of “dramatic change” in the industry, he explains. Finland’s shipyards lost one of their leading customers when it became unacceptable to deliver vessels to Russia after it invaded Ukraine. But demand for icebreakers on the other side of the Atlantic could more than compensate for this loss.

Finland’s expertise with icebreakers was one of the arguments used to justify its admission to Nato in 2023. Last July, the US and Canada agreed to establish an Icebreaker Collaboration Effort — known as the ICE Pact — with Finland, in which the three countries will co-operate in sharing expertise and resources.

It remains to be seen if Mr Trump will fully support the ICE Pact. Collaborating with allies may seem to contradict his ‘America First’ philosophy. Indeed, in announcing his plan for 48 new US icebreakers in March, the president took a potshot against Canada, a country he hopes to annex.

“We’re going to order 48, and Canada wants to be part of the deal,” said Mr Trump. “I say, ‘You got to get your own icebreakers. I mean, if you’re a state, you can be part of the deal, but if you’re a separate country, you’ve got to get your own icebreakers.’”

Collaboration

Mr Trump has been more positive about the US relationship with Finland, however. In late March, he hosted Finnish president Alexander Stubb for a game of golf, posting on social media afterwards that the US and Finland would work together on the “purchase and development” of icebreakers. 

Ordering icebreakers directly from Finland would require a change to regulations that require US Navy and Coast Guard vessels to be built domestically. Finland’s ICE Pact coordinator Reko-Antti Suojanen tells fDi Intelligence that a “relaxation” in these regulations is “the only way to come to our common goals.”

There is support in the US Congress for reforms that would allow the US to work with allies to speed-up naval construction. Republican senators Mike Lee and John Curtis introduced legislation in February that would allow the US Navy and Coast Guard to order vessels from allied countries, if the cost is cheaper than it would be from a US shipyard. 

But these proposals will have to contend with fears that closer collaboration could further weaken the US shipbuilding industry.

Meanwhile, Canada and Finland have been working collaboratively since even before the ICE Pact was signed. Helsinki Shipyard, a world leader in icebreaker construction, was acquired by Canada-based Group Davie in 2023, having previously been under Russian ownership. In March, the Canadian government awarded a C$3.25bn ($2.27bn) heavy icebreaker contract to Davie. Construction will begin at Helsinki Shipyard and be completed at Lévis in Quebec.

The project will be “an excellent showcase of what can be achieved if there is a well-functioning national co-operation in place”, says Kim Salmi, managing director of Helsinki Shipyard.

He adds that his company has “unique expertise” in icebreaker construction. “No other shipyard in the world has delivered as many icebreaking vessels as we have.”

“We are also able to build ice-going vessels with the fastest schedule on the market, in 36 months or quicker depending on requirements.”

Supply chain complexities

Although shipyards naturally attract attention, shipbuilding is a cross-border industry. A modern ship requires a huge number of advanced components that rely on global supply chains. 

One of the key players in the icebreaker industry, for example, is ABB, a Swedish-Swiss headquartered company that manufactures the popular Azipod propulsion system. 

“When we look at the icebreakers that are now being planned and built, global collaboration is important. A lot of technology is coming from different countries,” says Samuli Hänninen, segment manager for icebreaking ships at ABB Marine & Ports. “At ABB, we produce Azipod units in Finland, but our technology is coming from different countries in Europe.”

Azipod units will be included in the US Polar Security Cutters, the first of which is in the early stages of construction in Mississippi, as well as in Canada’s new heavy icebreakers.

Asked whether Azipod units could be manufactured in the US in future, Mr Hänninen said it would be “a question of demand”.

“There is no reason why it should not be possible. At the moment, at ABB we have three factories that focus on building Azipod units — two currently in Finland, where we have the engineering and technology expertise, and we have a factory in Asia focusing on supporting Asian shipbuilding.”

There is a long history of foreign investment in US shipyards. Italian Fincantieri, for example, owns three shipyards in Wisconsin, while the UK’s BAE Systems operates two facilities in Florida. 

And Hanwha Ocean acquired Philly Shipyard last year in a $100m deal to become the first South Korean company to own a US shipyard. Philly Shipyard is the largest manufacturer of domestic vessels for trade regulated by the Jones Act, though Hanwha hopes to expand into naval construction.

Laying the keel

Beyond icebreakers, the US is gearing up for a much more comprehensive effort to boost shipbuilding. The SHIPS for America Act (the title of which alludes to the CHIPS for America Act passed in 2022 to incentivise US semiconductor manufacturing), was put forward by a bipartisan group of lawmakers at the end of last year. It seeks to encourage US shipyards to build 250 US-flagged vessels in the next decade, adding to the just 80 US-flagged vessels currently on the high seas, partly through a 25% tax credit on shipyard investments.

John Michael, head of the maritime and offshore practice at law firm Vinson & Elkins, believes the proposed legislation would help make shipbuilding in the US more economically viable. “The Act, at least as it’s drafted now, seems to offer healthy subsidies for both capital costs and operating costs to own and operate a US-flagged vessel in international trade.” 

He emphasises that operating subsidies would continue throughout the vessel’s lifetime, which could be a key factor in convincing shipowners to order vessels from American yards.

But Mr Michael warns the various tariffs the Trump administration has threatened “could very much have a negative impact” by raising the costs of key input materials such as steel and aluminium.

Others question the whole premise behind efforts to revive US shipbuilding. Rico Luman, a senior economist covering the transport, logistics and automotive sectors at banking group ING, cautions that producing more vessels in the US could worsen existing overcapacity in the shipping industry. 

“We face a reality of dampened global trade growth,” he says, suggesting there is limited economic rationale for the US to produce huge numbers of commercial vessels. In addition, Mr Luman notes US shipbuilders would face huge challenges in training a new workforce without relying heavily on immigrant workers.

It could be argued that the current division of labour in shipbuilding represents globalisation working as it is meant to. The US has specialised in high-tech sectors, leaving countries such as China to find competitive advantages in heavy industries like shipbuilding. The economies of scale achieved in China’s shipyards have helped reduce the cost of trade, benefitting American consumers.

It is clear, however, that this narrow economic view has gone out of fashion in the US. 

“What we saw during the Covid-19 pandemic was, globally, a race to the bottom,” says Matt Paxton, president of the Shipbuilders Council of America. “We were all dependent on a couple of major shipping conglomerates, but really dependent on China and their maritime logistics.”

Mr Paxton welcomes support for domestic shipbuilding in the White House and Congress and believes the SHIPS Act could be a “foundational piece” that enables the industry to expand again. “Incentives are always critical,” he says. “If the SHIPS Act and this administration show private industry there is going to be predictable, stable demand signals, then these companies will invest.”

There is at least precedent for the US ramping up its latent industrial might at an hour of need. America’s shipyards were largely mothballed in the 1930s, but rose to the challenge of producing 4600 ships during the second world war. 

“We’ve done it before,” says Mr Paxton, “and I think we will do it again.”

Ben Payton is a freelance journalist based in London