US-China rivalry shifts to shipbuilding

The shipbuilding industry is set to be the new battleground for the two superpowers.

The ongoing tensions between US and China are expected to further escalate, shifting from tariffs to specific industries, specifically shipbuilding.

“We believe the rivalry between the two superpowers is set to escalate, and the conflict could shift from trade disputes to more strategic domains. One such domain is the shipbuilding and maritime industry,” Nomura said in a new report.

The company noted that China’s shipbuilding industry is currently composed of 307 shipyards, commands a 50.7% global tonnage share and has secured 62% of the global orderbook through 2033.

“Outpacing South Korea (global share of 28.3%) and Japan (15.4%), Beijing’s maritime supremacy is increasingly causing alarm in Washington and has triggered the USTR to impose hefty fee charges for China-built and owned vessels. On 9 April, President Trump signed an Executive Order aiming to restore America’s maritime dominance, with an explicit emphasis on countering China,” Nomura noted.

Whilst there is no expected significant short-term impac, Nomura said the US policies may cause additional costs on Chinese maritime operators and risk market share losses to South Korea and Japan. Upstream sectors such as steel and equipment could experience reduced demand, whilst the shipbuilding-related workforces in coastal hubs – which comprise an estimated 1.2mn workers – may face job insecurity, it added.

The latest measures from US may also fuel tensions between the two major economies, with Beijing expecetd to implement retaliatory measures, including rare earth export controls, to safeguard its interests.

“The latest escalation is, at least in part, due to Beijing’s reluctance to ease its existing export controls on rare earth minerals for entities in the US, as it views such measures as increasingly strategically important,” Nomura said.