Counterbalance Ep. 46 | China’s Dominance of Commercial Maritime Industry Should Serve as a Warning
Aug 18, 2022
Michael Roberts, an expert in maritime security and strategy, joins the discussion to reveal China's overwhelming dominance in the global shipping industry. He highlights the decline of the American maritime sector and its implications for national security. The conversation probes into the dangers posed by flags of convenience and abandoned vessels. It also critiques the legacy of free trade policies, weighing economic growth against national security, and advocates for urgent reforms to revitalize American maritime interests.
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The Jones Act Explained
- The Jones Act mandates that domestic shipping between US points use American-built, -owned, and -crewed vessels.
- This is considered protectionist, despite similar regulations applying to other domestic transport like pipelines and trucking.
US Absence in Global Shipping
- Despite the Jones Act, the US isn't a leader in global shipping, with landlocked countries like Switzerland and smaller nations like Israel having major players.
- US tax policies, especially the 1986 tax law, disadvantaged American ship ownership, leading to the sale of major US shipping companies to foreign entities.
Flags of Convenience
- Registering ships in countries like Liberia offers advantages like loose regulations on sailor pay, health, safety, and preferential taxation.
- These "flags of convenience" allow shipping companies to minimize costs and regulatory burdens.