Governmental Influence on Shipbuilding

Abstract

This capstone explores the decline of the U.S. shipbuilding industry from its post–World War II dominance to its current diminished state, analyzing the impacts of restrictive legislation such as the Merchant Marine Act of 1920 (Jones Act) and the end of the construction differential subsidy (CDS) in 1981. These factors have significantly reduced U.S. competitiveness with foreign shipyards leading to a significant decrease in shipbuilding output and capacity. The research conducts a detailed review of U.S. shipbuilding regulations, comparing them against the effective and often government-supported policies of European and Asian counterparts. This study uses qualitative and quantitative methods to evaluate how historical subsidies and the Jones Act have influenced the industry’s decline and proposes legislative and regulatory reforms based on successful international practices. The findings recommend a framework to revitalize the U.S. shipbuilding industry, including introducing expanded cabotage laws, reevaluating the Jones Act, and moving towards a more globally integrated regulatory approach. The U.S. shipbuilding industry can regain its competitive edge in the global market through strategic policy adjustments.