The following is a letter to the editor of The Wall Street Journal published originally on March 17, 2025, under the headline “The tax holding American shipbuilding back.”
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As reported in “U.S. Lags Far Behind Rivals Like China in Building Oceangoing Containerships” (Business News, March 3), America’s shipbuilding industry is minuscule compared with the rest of the world. But relying on protectionist policies as a solution is a mistake. We’ve already tried that with no success.
Take the Jones Act of 1920, which requires goods transported between U.S. ports to be carried on domestically built vessels, among other requirements. Advocates claim the law is essential for protecting the maritime industry, but as the article documents, the industry has declined under the act’s watch, largely because U.S. shipyards enjoy a captive domestic market with no real competition.
There are dedicated lobby groups whose sole purpose is to block even the most narrowly tailored exceptions to the law.
Meanwhile, as Matson builds three overpriced vessels in the Philly Shipyard, residents of my home state of Hawaii can expect to foot the bill through higher freight costs. The inflated cost of U.S.-built ships, which has risen faster than international counterparts, acts as a barrier to entry for potential competitors.
Protectionist policies such as the Jones Act are more effective as de facto taxes than as a legitimate strategy for strengthening American shipbuilding.
