The United States builds a mere 0.2% of the world’s ships while China dominates with a staggering 74% – now Norwegian Cruise Line’s CEO reveals why reviving American shipbuilding will take decades, not just policy.
At a Glance
- President Trump’s executive order on maritime aims to restore America’s shipbuilding industry through tax credits, grants, and strategic investments
- Norwegian Cruise Line CEO Harry Sommer warns developing U.S. cruise shipbuilding would require years or even decades of infrastructure development
- European shipbuilding success relies on government financing support with favorable interest rates and terms
- The U.S. currently builds only 0.2% of the world’s ships compared to China’s 74% market dominance
- Trump’s tariff policies have caused cruise stocks to tumble 11-17% amid concerns about economic impacts
Trump’s Bold Maritime Revitalization Plan
President Trump’s recent executive order on “Restoring America’s Maritime Dominance” has sent waves through the maritime industry, garnering widespread support from shipbuilders and maritime organizations. The comprehensive order establishes a Maritime Action Plan, a Maritime Security Trust Fund, and strategic commercial fleet programs aimed at reversing decades of decline in American shipbuilding capabilities. With the U.S. currently responsible for a paltry 0.2% of global ship production compared to China’s dominating 74%, the executive order introduces new tax credits, grants, and strategic investments to rebuild America’s once-formidable maritime manufacturing base.
Matthew Paxton, president of the Shipbuilders Council of America, enthusiastically endorsed the initiative, stating: “The Shipbuilders Council of America supports President Trump’s action to restore and strengthen America’s shipbuilding and ship repair industry. The establishment of a Maritime Action Plan that includes a Maritime Security Trust Fund, strategic commercial fleet program, along with new tax credits, grants, and strategic investments, will provide a powerful environment to rebuild our shipbuilding capacity and build the fleet of the future.”
Norwegian Cruise Line CEO’s Sobering Reality Check
While Trump’s vision to resurrect American shipbuilding is bold, Norwegian Cruise Line CEO Harry Sommer recently provided a much-needed dose of reality about what it would take to build cruise ships in America. At the Seatrade Cruise Global conference in Miami, Sommer explained that creating a shipbuilding industry from scratch isn’t just about policy – it requires developing an entire ecosystem that European countries have cultivated over decades. The infrastructure, skilled labor force, and financing mechanisms that countries like Italy, Germany, France, and Finland have established can’t simply be replicated overnight through executive orders or tariff policies.
“You know, really, it’s an entire ecosystem. Italy, and also Germany, France, Finland — there are four countries in Europe that build ships; all four of them have developed this comprehensive infrastructure. So yes, financing is definitely a piece of it. The Italian government supports the construction of ships for export, if you will, for use in international waters.” – Harry Sommer
Sommer emphasized that European governments provide critical financial support with “3, 4, 5 percent interest rates, fixed over a 12-year period” – terms that make their shipbuilding industry economically viable. Without similar government backing, American shipbuilders would struggle to compete globally. His stark assessment: “The United States can get into these things, but I want to be clear, it takes years to develop that type of talented infrastructure. So, it’s possible that we need to embark on a multi-year, perhaps multi-decade path.”
Tariff Troubles: Market Reaction Shows Economic Concerns
While the maritime industry applauds efforts to revitalize American shipbuilding, the broader market has reacted with anxiety to Trump’s tariff announcements. Major cruise lines saw their stock values plummet, with Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings experiencing drops between 11% and 17%. Wall Street overall suffered what the Wall Street Journal described as “a two-day rout that erased $6.6 trillion in stock-market value” following the tariff announcement. For all the patriotic appeal of “Made in America” cruise ships, investors clearly have concerns about the economic ripple effects.
“after the tariff announcement was made, Wall Street was plunged into a two-day rout that erased $6.6 trillion in stock-market value.” – Wall Street Journal
Looking at the bigger picture, Trump’s maritime ambitions reflect a worthy goal of restoring American industrial might, but the cruise ship sector illuminates the massive challenges involved. While Americans can build world-class naval vessels, the commercial shipbuilding sector has been so thoroughly hollowed out that restoring it requires more than just patriotic rhetoric and protectionist policies – it demands long-term commitment to building complex financial and industrial support systems. The question remains whether America has the patience for a multi-decade rebuilding project in an age of quarterly earnings reports and four-year presidential terms.
