American shipbuilding vs. agricultural exports: The trade-off timeline

A tug-of-war is brewing between building America's shipbuilding capacity and maintaining the competitiveness of U.S. agricultural exports. As Mike Steenhoek, Executive Director of the Soy Transportation Coalition, explains, this tension stems from recent USTR actions addressing Chinese dominance in global shipbuilding—a position China achieved through 25 years of focused development to capture over 50% of vessel production worldwide.While promoting domestic shipbuilding represents a worthy national goal, Steenhoek argues the implementation timeline creates impossible expectations for critical export industries. "I'd rather have government policy be predictably good than sporadically great," he notes, highlighting how short-term trade disruptions often lead to permanent shifts in global supply chains. When the 2018-2019 trade dispute with China redirected agricultural purchases toward Brazil, it accelerated Chinese investment in Brazilian infrastructure—investments that remain in place regardless of future U.S.-China relations.The immediate effects of current policies are already visible at American ports. The Port of Los Angeles projects a 35% decrease in vessel arrivals compared to last year, with retail inventory shortages expected within 5-7 weeks. For agricultural exporters, the situation threatens both immediate access to shipping capacity and long-term market relationships. When fees remain on vessels both built and operated by Chinese entities—vessels that currently transport substantial volumes of U.S. grain—the available shipping pool shrinks while export demand remains constant, inevitably driving up transportation costs. As Steenhoek aptly summarizes using an aviation metaphor: building domestic shipbuilding capacity requires a runway length appropriate for takeoff, not an aircraft carrier deck that sends the economy plunging into the ocean.Subscribe now to hear more conversations examining how transportation and trade policies affect the competitiveness of American agriculture.