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SEAS OF CONTENTION: THE NEXT FRONT IN THE US-CHINA TRADE CONFLICT ISN'T ON LAND

A day after officials from Washington and Beijing agreed on a framework to put their trade truce back on track, President Donald Trump said on Wednesday the U.S. deal with China was done, with Beijing to supply magnets and rare earth minerals.

In any event, according to Nomura analysts, the battlefield is shifting from traditional trade disputes to the vast blue expanse that carries 90% of global commerce - the shipbuilding and maritime industry.

"The shipbuilding and maritime industry is a key sector poised for heightened attention in coming years," writes Harrington Zhang, Asia Economics analyst at Nomura.

"The United States Trade Representative (USTR) recently introduced measures to challenge China's global dominance in this industry, and these could potentially feature in upcoming US-China trade negotiations."

On April 9, President Trump signed an Executive Order aiming to restore America’s maritime dominance, with an explicit emphasis on countering China.

Trump's "Make Shipbuilding Great Again" executive order and the USTR's newly imposed fees on Chinese-built vessels represent the opening salvos in what could become a protracted maritime struggle.

The stakes couldn't be higher, China commands a staggering 50.7% of global shipbuilding tonnage supported by 307 shipyards underpinned by the China State Shipbuilding Corporation (CSSC) conglomerate, and has secured 62% of the global orderbook through 2033. Meanwhile, the US contributes a mere 0.1% to global production, according to data from the UNCTAD.

Who stands to benefit? South Korean shipbuilders like Hanwha Ocean 042660.KS (formerly Daewoo Shipbuilding) and HD Hyundai Heavy Industries 329180.KS could capture redirected orders. Japan's shipbuilding giants—Mitsubishi Heavy Industries 7011.T and Mitsui E&S Holdings—are also well-positioned to gain market share.

The geopolitical implications extend beyond commerce. China's Military-Civil Fusion strategy has leveraged its commercial shipbuilding prowess to fuel naval expansion, with the PLA Navy projected to grow from 351 to 425 ships by 2030, dwarfing America's 295-ship fleet.

(Rashika Singh)

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