Notes to the New Administration Week

By Ben Massengale

Much has been written lamenting the possible economic consequences of raising tariffs and other protectionist methods that could reduce trade with the U.S. However, imposition of those tariffs could provide a window of opportunity to revive the U.S. Merchant Marine by making foreign vessels less competitive in conducting trade in the U.S. This could be done by granting cargo imported by U.S.-flagged vessels a reduced tariff to not only compensate for the additional cost it takes to operate an American ship, but also making its operations significantly more profitable than its foreign competitors. Such incentives could help promote more private investment in American shipping companies and maritime infrastructure needed to support U.S. maritime security.

Previous government actions to support the Merchant Marine have been ineffective because they focused on shielding the Merchant Marine from the market instead of addressing the underlying problems. Most laws supporting the Merchant Marine focused on providing limited subsidies for U.S. operators and expanding cargo preference laws, such as by mandating certain cargo be carried only by U.S.-flagged and/or U.S.-built ships. The last major maritime law passed in 1920 (also called the Jones Act) established the current restrictions that only American-built, owned, operated, and flagged ships could engage in U.S. coastal trade (U.S. interstate commerce). Overseas built vessels could be U.S.-flagged but were banned from the domestic shipping market. Nothing was done to address the issues causing American ships to become more expensive to build and maintain, and therefore less competitive, than foreign ships. By shielding the fleet, Congress inadvertently minimized incentives for private operators or shipyards to modernize their fleets or practices that keep operating costs up. As a result, the number of U.S.-flagged merchant ships has only gone down and the number of operating shipyards has similarly declined.

As of 2024, there are 185 oceangoing U.S.-flagged vessels (of which 59 are containerships), which is insignificant compared to the over 6,100 containerships used globally. As over 900,000 ships visit American ports yearly, even the most generous exemption is unlikely to noticeably impact efforts to revitalize U.S. manufacturing in the medium term that are the tariff’s primary objective. However, assume a tariff relaxation of 15 from 25 percent for goods imported on U.S.-flagged ships (including those built overseas) was authorized. Consumers, in theory, would see a savings of $50 on a hypothetical $500 pre-tariff imported washing machine carried by a U.S.-flagged vessel over a foreign one, but this is unlikely to appear due to the limited capacity of the U.S. Merchant Fleet. It would result in the shipment of 2,500 shipping containers being $27 million cheaper than goods carried by a foreign-flagged vessel (assuming average value of goods per shipping container is $108,000). Given how the U.S.-flagged ships in 2018 were $6.5 million more expensive to operate annually than other ships, this expense would be covered by a single voyage, making subsequent trips drastically cheaper than other ships. Import companies would be heavily incentivized to use American ships for their imports.

Such exemptions would make the U.S. Merchant Marine profitable. If even stronger exemptions were offered for American-flagged and built ships, it would encourage private investment into American shipyards and related manufacturing to improve U.S. shipbuilding and repair capacity. This would also help the U.S. Navy’s efforts to increase its fleet size and readiness by expanding the foundation of the broader maritime industrial base.

It is difficult to determine how long it would take to build new shipbuilding capacity as no new American shipyards have been built in over ten years. Seven years is a reasonable estimate, given it took five years in the 1970s to construct the original Daewoo shipyard located at Okpo, South Korea (today one of the country’s three largest shipyards) and time to obtain regulator approval before breaking ground. Expanding the repair or shipbuilding capacity of existing private shipyards could be done in a smaller timeframe but would likely still take years to complete.

Tariff exemption is not the same as the cargo preference laws Congress has previously passed to prop up the Merchant Fleet. Those laws were intended to ensure guaranteed business for U.S. shipping companies, but also led to higher costs for the government due to the limited number of ships that met the requirements imposed by those laws. That business was largely dependent on the resupply of U.S. military forces operating overseas and American aid programs. A tariff exemption would work with the market instead of the government artificially generating one. American imports have always remained high, which makes them a more sustainable means of business support compared to cargo preference laws.

A tariff exemption will not completely restore the U.S. Merchant Marine by itself. Numerous other issues, such as high cost of labor and building material, still need to be resolved to address demand signals, labor pools, government regulations, the lack of shipbuilding and ship repair capabilities, and other costs imposed by the Jones Act. These are problems that will require Congress and the White House to work together to revamp the laws and policies needed to rebuild America’s maritime capabilities.

However, an exemption will grant U.S.-flagged ship operators more fiscal space to grow their operations and modernize their fleets. It will incentivize other shipping companies to change from their “flag of convenience” to the U.S. flag. These will generate more jobs because of the need to meet crewing requirements while introducing more competition into markets generated by cargo preference laws and lowering the cost of government shipping contracts. By making foreign-flagged ships less competitive in serving the U.S. economy, the new administration could move to strengthen the U.S. merchant fleet, incentivize more private investment in the American maritime industry, and make the Merchant Marine more capable of supporting the nation in times of crisis or war.

Ben Massengale is a Submarine Officer and the AY25 Visiting Navy Fellow to the Stimson Center. He is a graduate of Texas A&M Galveston and holds a Masters in Defense and Strategic Studies from the Naval War College.

The opinions expressed are those of the author and do not necessarily reflect the official views or policy of the U.S. Defense Department, the Department of the Navy nor the U.S. government.

Featured Image: CMA CGM Benjamin Franklin docks at the Port of Los Angeles. (Photo via Wikimedia Commons)

Notes to the New Administration Week

By Shelley Gallup and Ben DiDonato

In past wars, small and well-armed ships have been a necessary complement to the large, multipurpose ships that dominate today’s U.S. Navy. China on the other hand utilizes a full range of maritime capabilities to outmaneuver the U.S. fleet. These ships can easily overwhelm the navies of smaller nations, like the Philippines, creating an unsustainable demand signal for support from large U.S. ships.

Scholars and engineers at the Naval Postgraduate School have developed a bi-modal fleet concept featuring a mix of small sea denial and large sea control vessels to correct this weakness. The key to implementing this strategy is the LMACC, or Lightly Manned Automated Combat Capability. This small warship combines autonomy, AI, resilient communications, and passive cloud-based sensor fusion to fight inside the Chinese engagement envelope. It is intended to operate within a scalable, networked flotilla alongside a variety of unmanned systems as well as Marines ashore. This will extend their Expeditionary Advanced Base Operations (EABO) doctrine into a more lethal and agile combined arms force able to overcome China’s capabilities. Furthermore, the features that make LMACC ideal for supporting Marines deep inside the first island chain also allow it to take on lower-intensity missions, such as special operations support and maritime patrol, making it an ideal choice for supporting President Trump’s stated goal of countering the cartels in the Gulf.

Unlike truly unmanned vessels, LMACC can be built today to affordably grow the fleet. It consists almost entirely of fielded systems and most preliminary design work is already done. Pre-covid estimates put the series production cost at about $100 million and its small size allows it to be built in struggling shipyards too small to build current warships. Furthermore, the human crew eliminates the legal and technological risks of unmanned systems. They can override the AI whenever needed and repair equipment that breaks down unexpectedly, building more confidence into these systems and informing future designs.

LMACC will also serve a critical function in developing future leaders. In today’s destroyer-centric surface fleet, platform command opportunities are mostly only available after more than a decade of service. LMACC is intended as an O-3 command, affording naval officers an opportunity to command earlier in their careers and develop critical leadership skills, including initiative, adaptability, and tactical acumen. Autonomous systems will become increasingly important, but cultivating command skillsets earlier in careers is a key benefit that smaller platforms bring to fleets.

Small warships have a long history in the U.S. Navy and are poised to offer an evolutionary leap in capability. Small, highly automated, lightly crewed, blue water warships will help offset the capabilities of competing fleets and ensure enduring maritime superiority for the U.S. Navy. It is time to fund and build a prototype of the LMACC and its flotilla of innovations.

Dr. Shelley Gallup is a retired surface warfare officer. As an Associate Research Professor at the Naval Postgraduate School, Dr. Gallup has spent 25 years assisting the Navy in developing large-scale experiments at sea. His current work includes research in human-machine partnerships, the role of emergence in combat at sea, and leads the small warship LMACC project at NPS. He can be contacted at [email protected].

Ben DiDonato is a volunteer member of the LMACC team. He is responsible for LMACC’s armament and most engineering work. He has provided systems and mechanical engineering support to organizations across the defense industry from the U.S. Army Communications-Electronics Research, Development and Engineering Center (CERDEC) to Lockheed Martin Missiles and Fire Control, working on projects for all branches of the armed forces. He currently serves as vice president of technology for Expanse Laboratories Corporation, a startup developing novel physical encryption technology. He can be contacted at [email protected].

Featured Image: LMACC design screenshot courtesy of Ben DiDonato.

Notes to the New Administration Week

By Christopher Costello

The United States needs a true, comprehensive maritime strategy. It takes the form of an interconnected effort that recognizes that seapower does not flow from naval power alone and the conditions under which the U.S. developed into a great maritime power have shifted. Readjustment is necessary. The Trump Administration and 119^th Congress have an opportunity to align political will and draft a comprehensive maritime strategy to guide agencies towards the lodestar of rebuilding all facets of maritime power.

The new administration should focus on shipbuilding, seafaring, and sway. Economic power is the root of American prosperity, yet the U.S. has grown dependent on an open, globalized manufacturing and shipping environment that is now threatened by revisionist powers. To counter that threat, American shipbuilding needs to be prioritized with infrastructure investment coupled with funding for port and waterway improvement. The new administration can incentivize industry to continue to expand relationships with various maritime stakeholders and encourage a new approach to procurement that can help revive a once world-class program of innovation, design, and manufacture.  

Seafarers and those who enable them need to be incentivized, including skilled vocational training programs across the nation to grow mariner capacity. Bolster the Merchant Marine Academy and ensure the state maritime academies and merchant mariner training institutes have the support necessary to add additional seafarers to the fleet. Apprenticeships and skilled vocational training should be as prolific and prescriptive as undergraduate admissions programs and internships. Seafaring should be incentivized to be a stable, remunerative career field, not a solitary sojourn to endure before heading ashore to literal greener pastures.

Lastly, the national maritime strategy must have sway – the ability to coordinate the soft power of influence with the hard power of economic, political, and military policy. The Department of Transportation, MARAD, the Federal Maritime Commission, U.S. Transportation Command, the Department of Homeland Security, and the Coast Guard require political support to elevate their efforts into the worthy national maritime enterprise this country deserves, akin to the attention and funding of the military sea services.

A cohesive and committed maritime strategy that emphasizes shipbuilding, seafarers, and sway will support the upcoming National Security Strategy and help mitigate key shortfalls in the National Military Strategy and various service strategies. Members of the 118^th Congress already pitched for the creation of a new council and position to oversee a maritime strategy, and the time to act is now.

Christopher Costello, PhD is an Associate Professor of National Security Affairs at the Naval War College.

The views expressed in this article are presented in a personal capacity and do not necessarily represent the official views of the Naval War College, the Department of the Navy, or the United States.

Featured Image: ARC Integrity (Photo via Wikimedia Commons)

Notes to the New Administration Week

By Commander Ander S. Heiles, USN

The United States is unprepared to face its greatest maritime challenge since World War II. For the first time since 1945, a peer competitor threatens America’s naval supremacy and dominance in global trade. China now commands the world’s largest combat fleet and a merchant marine with over 7,000 vessels that dominate international shipping lanes. Naval theorist Alfred Thayer Mahan warned of this scenario in 1890, arguing that national power rests on sea power – the integration of combat and commercial maritime strength to secure a nation’s interests.¹ Yet today, the U.S. lacks a comprehensive maritime strategy.

Despite this growing threat, the current tri-service maritime strategy, Advantage at Sea (2020), focuses narrowly on combat capabilities only, emphasizing “sea control” without mentioning “sea power” or commercial maritime activity.² Similarly, the Chief of Naval Operations’ 2024 Navigation Plan prioritizes sea control but ignores the broader foundation of maritime power.³ These documents reflect a fundamental departure from Mahan’s vision that national maritime power requires both combat and commercial capabilities to work in concert.

This conceptual blindspot has created not just a maritime crisis but a national security crisis. While America has focused solely on maintaining naval superiority, China has pursued Mahan’s comprehensive approach to national power through sea power. Since 2004, as the PLA Navy grew by 71 percent, China’s merchant fleet expanded by an astounding 372 percent, following Mahan’s principle that commercial strengths form the foundation of national power.

Neglecting commercial maritime capabilities has dire consequences. The U.S. Merchant Marine has declined by 93 percent, from 2,900 vessels in 1960 to under 200 today. Once handling 60 percent of global trade, U.S.-flagged ships now carry just two percent of the nation’s own overseas commerce. This collapse has led to a shortage of 1,800 credentialed mariners, creating a critical personnel gap. Strategically, the implications are severe. Controlling key maritime chokepoints like the Panama Canal is marginally useful if America lacks the merchant ships to leverage them.

The incoming administration must prioritize three key actions to restore U.S. sea power. The first is to develop a comprehensive National Maritime Strategy, which would treat the Merchant Marine as vital to national security, equal to naval power, and embrace Mahan’s principle that commercial maritime strength underpins naval capability. Second, revitalize U.S. shipbuilding and invest and incentivize U.S. shipyards. Only five U.S. yards can build large commercial vessels, while a single Chinese yard surpasses all U.S. capacity combined. Finally, the mariner shortage can be addressed by expanding training programs and introducing incentives to attract and retain civilian mariners.

The administration faces an urgent choice – continue America’s narrow focus on naval power or comprehensively rebuild the commercial capability Mahan identified as essential to national power. By restoring the balance between combat and commercial maritime capabilities, the U.S. can secure its position in the era of great power competition.

Commander Ander Heiles is a student at the Joint Advanced Warfighting School in Norfolk, VA. He commanded USS Monsoon (PC 4) and is the Prospective Executive Officer (P-XO) for the Naval Talent Acquisition Groups (NTAG) Empire State.

The views expressed here are those of the author and do not necessarily represent the official positions or opinions of the U.S. Navy, the Department of Defense, or any part of the U.S. government.

References

1. Alfred Thayer Mahan, The Influence of Sea Power Upon History 1660-1783 (New York: Dover Publications 1987).

2. U.S. Department of the Navy, U.S. Marine Corps, and U.S. Coast Guard, Advantage at Sea: Prevailing with Integrated All-Domain Naval Power (Washington, DC: U.S. Government Publishing Office, 2020), https://media.defense.gov/2020/dec/16/2002553074/-1/-1/0/triservicestrategy.pdf.

3. U.S. Department of the Navy, CNO NAVPLAN 2024 (Washington, DC: U.S. Department of the Navy, 2024),  https://www.navy.mil/Portals/1/CNO/NAVPLAN2024/Files/CNO-NAVPLAN-2024.pdf.

Featured Image: A container ship passes under the Golden Gate Bridge. (Photo via Wikimedia Commons)