Naval power has long been a cornerstone of great power status, enabling nations to project influence, secure trade routes, and assert dominance across the globe. From the British Royal Navy’s unchallenged supremacy in the 18th and 19th centuries to the United States’ maritime dominance in the 20th century, a strong navy has been synonymous with global influence. Today, China’s rapid naval expansion signals its ambitions as an aspiring superpower, while the United States grapples with a deindustrialized shipbuilding sector.
Historical Context: Naval Power as a Pillar of Great Power Status
Naval power has historically been a decisive factor in establishing and maintaining global dominance. In the 18th and 19th centuries, the British Royal Navy’s unparalleled fleet enabled the United Kingdom to build and sustain the largest empire in history.
With ships like HMS Victory and a network of global bases, Britain controlled vital sea lanes, enforced trade monopolies, and secured victories in pivotal battles such as Trafalgar (1805). The Royal Navy’s “two-power standard”—maintaining a fleet larger than the next two navies combined—ensured its supremacy, making Britain the guarantor of global trade and security during the Pax Britannica.
By the late 19th century, the United States began to recognize the importance of naval power. Captain Alfred Thayer Mahan’s influential 1890 article, “The United States Looking Outward,” argued for a shift from continental focus to maritime expansion.
The U.S. Navy’s growth, particularly during and after World War II, transformed the U.S. into a maritime superpower. By 1945, the U.S. Navy boasted over 6,000 vessels, including 28 large aircraft carriers, dwarfing all competitors. This industrial and naval might enabled the U.S. to project power globally, secure trade routes, and maintain its superpower status through the Cold War and beyond.
The Rise of China’s Naval Power
Today, China is following a similar playbook, leveraging its massive shipbuilding industry to build a navy capable of challenging U.S. dominance. The People’s Liberation Army Navy (PLAN) is now the world’s largest by number of vessels, with over 370 battle force ships compared to the U.S. Navy’s 291 as of 2025.
China’s shipbuilding capacity, which accounts for over 50% of global commercial ship production, dwarfs that of the U.S., which holds a mere 0.1% of the global market. In 2024, a single Chinese shipbuilder produced more commercial vessel tonnage than the entire U.S. industry has since World War II.
China’s naval modernization, driven by state-owned enterprises like the China State Shipbuilding Corporation (CSSC), integrates commercial and military shipbuilding. This “military-civil fusion” strategy allows China to rapidly expand its fleet with advanced destroyers, frigates, and aircraft carriers like the Fujian.
Since 2014, China has launched naval vessels with a total tonnage exceeding that of entire navies like those of France, Germany, or India. The PLAN’s growing arsenal of anti-ship cruise missiles and vertical launch systems (VLS) gives it a first-strike advantage in potential conflicts, particularly in the Western Pacific.
China’s naval buildup aligns with its broader geopolitical ambitions, including securing maritime rights in the South China Sea and projecting power globally. President Xi Jinping’s 2018 call for a “powerful navy” underscores this urgency, with the PLAN expected to grow to 435 ships by 2030. This rapid expansion threatens to alter the balance of power in the Indo-Pacific, challenging U.S. and allied interests.
The Decline of U.S. Shipbuilding
The U.S. shipbuilding industry, once the backbone of its World War II victory, has undergone significant deindustrialization since the 1980s. The Reagan administration’s reduction of subsidies for commercial shipbuilding, in favor of free-market principles, led to a sharp decline in U.S. market share.
By 2023, China, South Korea, and Japan accounted for 56%, 28%, and 13% of global shipbuilding tonnage, respectively, while the U.S. contributed just 0.04%. Decades of focus on service and technology sectors, coupled with labor-intensive shipbuilding shifting to lower-cost countries, left U.S. shipyards reliant on government contracts and the Jones Act, which mandates U.S.-built vessels for domestic shipping.
The U.S. Navy faces additional challenges, including a maintenance backlog estimated at 20 years, aging infrastructure (e.g., drydocks dating back to 1833), and delays in major programs like the Columbia-class submarine and Constellation-class frigate.
These issues, compounded by a shrinking fleet (projected to dip to 280 ships by 2027), undermine the Navy’s ability to sustain a high-intensity conflict in the Pacific.
Trump’s “Big Beautiful Bill” and U.S. Shipbuilding Revival
In response to these challenges, President Trump’s administration has prioritized revitalizing U.S. shipbuilding. In 2025, Trump announced the creation of a White House Office of Shipbuilding and proposed a “big beautiful bill” to boost the industry with billions in subsidies and incentives. The bill aims to subsidize 250 U.S.-built commercial vessels for a “strategic commercial fleet” and train more mariners to address labor shortages.
However, experts warn that rebuilding an industry decimated over decades is a generational project. The U.S. faces hurdles like outdated infrastructure, a lack of skilled workers, and high costs—U.S.-built ships can cost up to $330 million compared to $70 million for similar vessels in Asia.
Previous attempts to revive U.S. shipbuilding, such as post-1995 efforts in Philadelphia, have largely failed. The Shipyard Infrastructure Optimization Program, with a projected cost exceeding $21 billion, aims to upgrade facilities but won’t close the gap with China’s capacity.
A comprehensive industrial strategy, including $50 billion in subsidies over five years, could increase U.S. shipbuilding capacity from 0.13% to 5% of the global market, but this would require sustained political will and investment.
Regional Collaboration: QUAD and South Korea
Given the U.S.’s industrial constraints, collaboration with allies like Japan, South Korea, India, and Australia offers a viable strategy to counter China’s naval dominance. Japan and South Korea, which together accounted for 40% of global ship deliveries in 2023, possess advanced shipbuilding industries with expertise in high-value naval vessels and automation.
South Korea’s Hanwha and Japan’s Mitsubishi Heavy Industries could support U.S. naval construction and maintenance, potentially through joint ventures or repairs at international shipyards. The U.S. has already explored maintenance work in Japan and Australia under partnerships like AUKUS.
The Quadrilateral Security Dialogue (Quad), comprising the U.S., Japan, India, and Australia, provides a framework for maritime collaboration. Japan’s Maritime Self-Defense Force, with 34 destroyers and 21 submarines, remains a formidable regional player despite being overtaken by China.
India, ranked 5th globally in naval tonnage (593,603 tonnes) and 6th in fleet strength (293 vessels) in 2025, is expanding its navy with indigenous aircraft carriers and submarines. Australia, with its AUKUS commitment to nuclear-powered submarines, enhances the coalition’s capabilities. Collaborative efforts could include joint shipbuilding, technology sharing, and coordinated patrols to secure critical sea lanes in the Indo-Pacific.
Strategic Implications and Challenges
Collaboration with allies offers significant benefits but faces obstacles. U.S. protectionist laws, such as the Jones Act and “buy American” quotas, limit foreign shipbuilding partnerships. Technology transfer restrictions and concerns about domestic industrial health further complicate cooperation.
For example, while Japan and South Korea could alleviate U.S. maintenance backlogs, relying on foreign shipyards risks long-term dependency.
Moreover, China’s integrated military-commercial shipbuilding model provides a unique advantage. Its ability to shift commercial yards to military production during a conflict gives it unmatched scalability. In a prolonged war, China’s capacity to replace losses could outpace the U.S., mirroring the U.S.’s industrial advantage over Japan in World War II.
The U.S. and its allies must balance immediate needs with long-term investments in domestic capacity to avoid a “death spiral” of early losses leading to further disadvantages.
Naval power remains a critical determinant of great power status, as demonstrated by the British Royal Navy’s historical dominance and the U.S. Navy’s post-World War II supremacy. China’s rapid naval expansion, backed by its dominant shipbuilding industry, poses a direct challenge to U.S. maritime dominance.
While Trump’s “big beautiful bill” signals intent to revive U.S. shipbuilding, the industry’s deindustrialization presents formidable hurdles. Regional collaboration with Japan, South Korea, India, and Australia offers a strategic counterbalance, leveraging their advanced shipbuilding and naval capabilities within frameworks like the Quad.
However, overcoming protectionist barriers and aligning allied interests will be critical to maintaining a free and open Indo-Pacific. The future of global naval supremacy hinges on the ability of the U.S. and its allies to adapt to this new era of maritime competition.
