Japan-US Shipbuilding Revitalization Fund under discussion

The Japanese government will issue a major new shipbuilding directive next month, aimed to revive an industry it used to lead the world in, as well as using the nation’s yards as a bargaining chip in trade talks with the Donald Trump administration in the US. 

Using the 2022-promulgated Economic Security Promotion Act, Tokyo will aim to revive dormant shipbuilding and repair docks and support the construction of new shipbuilding facilties both at home and overseas.

Tokyo and Washington are also close to establishing a Japan-US Shipbuilding Revitalization Fund, with Japanese yards pitching to build car carriers and LNG vessels, as well as investing in yards in the US. 

The two nations are also discussing naval ships and icebreakers, as well as ways to build a maritime supply chain between Japan and the US that is not dependent on China.

China currently holds 70% of global shipbuilding capacity and nearly 90% of repair capacity. Japan’s share of shipbuilding volume was about 50% in the early 1990s, but has now fallen to around 10%. 

Both Japan and South Korea have been holding many meetings with US officials in recent months to try and pivot away from China’s maritime dominance. In October, the Trump administration is set to enact increased port fees on Chinese-linked tonnage calling in the US, one of a host of measures the US government is taking to try and curb China’s growing maritime power.