Trump’s One Big Beautiful Bill sets up provisions to strengthen US shipbuilding

July 8, 2025, by Sara Kosmajac

The United States government has unveiled sweeping investment packages as part of the One Big Beautiful Bill Act (OBBBA) aimed at modernizing its shipbuilding industrial base, reducing reliance on foreign-flagged vessels and revitalizing US manufacturing.

Illustration; Image courtesy: The White House under public domain

Among the provisions that President Donald Trump‘s administration has envisioned under OBBBA, at least nine comprise ‘substantial’ financial packages meant for the rejuvenation of the American vessel construction industry, which has largely been falling behind the world’s ‘Big Three’, i.e. China, which has been on the top spot, South Korea and Japan.

The packages entail support for both the commercial and naval shipbuilding sectors. According to the OBBBA, a wide range of infrastructure and technology investments is to be covered by the available funds.

As disclosed, the US government is setting aside at least $492 million for next-generation shipbuilding techniques, to go toward novel technologies that would help US-based companies strengthen their foothold in the sector.

Per OBBBA, several packages encompass support toward industrial material production. The bill, thus, includes $250 million for the domestic manufacturing of turbine generators as well as $450 million for wire production and machining capacity for the shipbuilding industrial base.

Moreover, at least $85 million is intended to go toward the manufacturing of United State-made steel plates, while $110 million is to be splashed for rolled steel and fabrication facility for the vessel construction industrial base.

As informed, the OBBBA has also set up provisions for naval shipbuilding as follows: $50 million for machining capacity for naval propellers, $750 million for additional supplier developments across this sector, as well as a $400 million for the expansion of collaborative campus.

In addition to this, $450 million has been put aside for the application of autonomous solutions and artificial intelligence (AI) in naval shipbuilding.

The packages as set up under the OBBBA come practically on the heels of President Trump’s announcements regarding the revitalization of United States shipbuilding. With the capacity to build only five vessels per year, compared to the over 1,000 constructed by China annually, the US has largely been falling behind. However, since December last year, several steps and measures have been proposed to try and strengthen the country’s position in the sector.

For instance, in March this year, President Trump spoke to the Congress, revealing there were intentions to establish a new Office of Shipbuilding in the White House and to introduce special tax incentives for shipyards to ‘bring back’ manufacturing to United States shores.

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In May, US lawmakers reintroduced the SHIPS for America ACT, a ‘historic’ legislation to revamp the vessel construction sector and commercial maritime industries, while simultaneously acting as a wrench in the gears to China’s dominance.

As proposed in the act, a fleet known as the ‘Strategic Commercial Fleet’ would be set up, consisting of active, commercially viable, military useful, privately owned vessels that could meet national defense and other security requirements while helping maintain US presence in international maritime transport. The bill, which was initially unveiled in December last year, envisions no more than 250 units to be deployed at any given time.

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On this path toward ‘restoring America’s maritime dominance’, US officials have made some attempts to forge ties across the sea. One such example is a May 2025 meeting between the South Korean shipbuilding industry and the United States Trade Representative (USTR) during which the parties discussed collaboration opportunities in shipbuilding. This was said to be the ‘first time ever’ that representatives of the sector from South Korea held talks with the US.

However, the relationship between the two nations is being threatened by a recent development. Specifically, on July 7, President Trump said it would impose a 25% reciprocal tariff on all South Korean exports beginning on August 1.

Revealed in a social media post, the blanket tariffs have already raised concerns over their potential impact on bilateral trade. Given that a significant portion of South Korean exports—including automobiles, electronics, and machinery—is transported by sea, the maritime shipping sector could face immediate consequences.

While the shipbuilding sector is not directly targeted by the tariff measure, broader trade uncertainty could still have an indirect effect. Industry observers note that prolonged disruption in South Korea’s export volumes might influence downstream demand for certain vessel types, such as containerships, car carriers or even LNG carriers, if global logistics volumes decline.