The United States might be losing another war — one that could define the country’s security into the next century.
Military and commercial power are intertwined. Maritime power, in particular, has always played a crucial part in establishing and maintaining commercial power. America is learning this lesson the hard way.
For hundreds of years, the countries that have ruled the waves have ruled the world, as the 19th-century American naval strategist Alfred Thayer Mahan put it. In an age of drones, we can be forgiven for thinking this time has ended. Yet today, more than 80 percent of global trade is still transported by ships. America has all but lost the ability to build them. A country that manufactured 5 percent of the world’s fleet by tonnage and that dominated the global maritime industry in the 1970s makes 0.2 percent of the world’s fleet by tonnage today.
How did we get here? During the Reagan era, U.S. policymakers decided to stop supporting commercial shipping, which quickly migrated to other countries like Japan and South Korea. Meanwhile, the defense arm of the naval industry shrank after the post-Cold War defense cuts of the 1990s. At the same time, the Chinese decided to make shipbuilding and maritime industries a strategic priority, tripling production relative to the United States over the past two decades.
The Chinese now dominate in terms of sheer production capacity and their global market share of shipbuilding, thanks to decades of state support. In 2006, the government named shipbuilding as one of the seven strategic industries over which state-owned Chinese enterprises had to maintain control. By 2015, Beijing identified shipbuilding as one of 10 priority sectors through which China would dominate global commerce.
All this was happening as the United States was going in the opposite direction, outsourcing the building of not only ships but many other supply chains in industrial sectors. It was part of a grand bargain in which American capital flowed to China, and U.S. consumers got cheap goods in exchange. But all the while, American jobs, as well as supply chain resiliency and in some cases national security, were sacrificed.
