Have you ever wondered what it takes to turn a bold promise into reality? When it comes to global trade, the stakes are sky-high, and the Trump administration’s recent push for energy exports is no exception. New trade frameworks with nations like the EU, Indonesia, and South Korea are making headlines, with pledges for massive liquefied natural gas (LNG) purchases. But here’s the catch: a new U.S. policy aimed at boosting domestic shipbuilding could throw a wrench in these ambitious plans. Let’s dive into why this clash between trade wins and maritime reality matters—and what it means for America’s energy future.
The Clash of Ambition and Reality
The U.S. is riding a wave of optimism about its role as a global energy powerhouse. With trade deals spotlighting LNG exports, the administration is banking on America’s vast natural gas reserves to fuel economic growth and strengthen ties with allies. But a new mandate from the U.S. Trade Representative (USTR) is stirring up trouble. Starting in 2028, a portion of LNG exports must be carried on U.S.-flagged ships, and by 2029, those ships need to be built in American shipyards. Sounds patriotic, right? Maybe. But the reality is far messier.
Why Shipbuilding Is the Bottleneck
Here’s where things get tricky. Building a modern LNG tanker isn’t like assembling a backyard shed—it’s a complex, costly, and time-intensive process. According to industry experts, the U.S. is woefully unprepared to meet these new requirements. Out of 331 LNG vessels planned globally in the coming decades, only one is on order from a U.S. shipyard. That’s right—one. And to hit the USTR’s target of 15% of LNG exports on U.S.-built ships by 2047, the country would need around 45 vessels. The math just doesn’t add up.
The requirement to move LNG on U.S.-built ships is problematic. We’ve lost a lot of shipbuilding capacity over decades.
– Energy market analyst
I’ve always believed that ambition drives progress, but ambition without infrastructure is like a car without wheels. The U.S. hasn’t built a commercial ocean-going LNG carrier in nearly half a century. Most of the shipyards still operating focus on Jones Act vessels—those built for domestic routes—or Navy projects. Scaling up to meet global export demands? That’s a tall order.
The Global Shipbuilding Landscape
Let’s put this in perspective. Globally, there are 682 LNG carriers in operation, and South Korea builds a whopping 78% of them. Japan and China handle most of the rest, with 13% and 7%, respectively. The U.S.? We’re barely a blip on the radar. The last American-built LNG carrier, the LNG Aquarius, hit the water in 1977 and now sails under an Indonesian flag. Meanwhile, South Korean shipyards dominate the order books, with 64% of new vessels under construction, and China is catching up fast with 32%.
| Country | Share of LNG Fleet | Share of Order Book |
| South Korea | 78% | 64% |
| Japan | 13% | Minimal |
| China | 7% | 32% |
| United States | 0.1% | 0.3% |
This global dominance by Asian shipyards isn’t just a matter of numbers—it’s about expertise, efficiency, and cost. A typical LNG carrier costs around $260 million to build. In the U.S., that price tag could balloon to two or even four times higher due to labor costs and limited shipyard capacity. Can America compete in this space? I’m not so sure.
The Labor and Cost Conundrum
Beyond the lack of shipyards, there’s a deeper issue: skilled labor. Building an LNG tanker requires specialized workers—think pipefitters, welders, and carpenters with years of training. The U.S. is facing a shortage of these craftspeople, and ramping up hiring to meet a tight deadline is no small feat. One expert I came across put it bluntly: trying to build a fleet under these constraints is like trying to bake a wedding cake with no oven.
There aren’t enough skilled workers to build all these ships by the set deadlines. It’s a huge challenge.
– Shipping industry consultant
Add to that the cost factor. Higher labor costs in the U.S. mean pricier ships, which could make American LNG less competitive on the global stage. If you’re an EU buyer, why pay more for U.S. gas shipped on expensive U.S.-built vessels when you could get it cheaper elsewhere? It’s a question that keeps me up at night, and I bet it’s haunting policymakers too.
The USTR Mandate: A Closer Look
The USTR’s policy isn’t just a random flex—it’s part of a broader push to counter China’s dominance in global shipbuilding, which accounts for 75-80% of freight fleets. The idea is to revive America’s maritime industry, create jobs, and boost national security. Starting in April 2028, 1% of LNG exports must be carried on U.S.-flagged ships, and by 2029, that 1% must be on U.S.-built vessels. The requirement ramps up by 1% each year, hitting 15% by 2047. It’s a bold vision, but is it feasible?
One potential workaround is reflagging—taking foreign-built ships and registering them under the U.S. flag if they meet certain conditions, like being owned by U.S. entities. But even this comes with caveats. Reflagged ships might still need waivers to carry LNG exports, and those waivers come with a 25% cost increase on vessel components. It’s a Band-Aid solution at best.
The SHIPS Act: A Legislative Lifeline?
Enter the SHIPS for America Act, a bipartisan effort led by lawmakers like Senator Mark Kelly and Representative John Garamendi. This legislation aims to close the gap with international shipbuilders through incentives and programs. It even includes a Strategic Commercial Fleet Program (SCFP) that allows foreign-built ships to be reflagged for up to seven years (with possible extensions). But replacing those with U.S.-built ships over time? That’s where the plan gets shaky.
- Incentive programs: Subsidies to boost U.S. shipyard capacity.
- Reflagging options: Temporary use of foreign-built ships under U.S. flags.
- Long-term goal: Build a domestic fleet to rival global leaders.
I’ll be honest—I admire the ambition here. Reviving an industry that’s been dormant for decades is no small feat, and the idea of American-made ships carrying American energy is appealing. But the timeline feels like a race against the clock, and the finish line is a long way off.
What Happens If We Fall Short?
If the U.S. can’t build enough LNG carriers, the ripple effects could be significant. For one, LNG exports could stall, undermining the very trade deals the administration is touting. This could also impact crude oil production, since many oil wells produce natural gas as a byproduct. Shutting in production to meet export mandates? That’s a scenario no one wants.
Then there’s the economic angle. If LNG prices drop due to export bottlenecks, producers might face losses, and allies relying on U.S. energy could turn to competitors like Qatar or Russia. It’s a classic case of good intentions meeting harsh realities. Perhaps the most frustrating part is that waivers—already used in the past for Jones Act vessels—could be the only way out, but they come with their own costs.
Without flexibility, we risk bottling up our own exports when allies need our energy most.
– Former maritime official
Can Innovation Save the Day?
There’s a glimmer of hope on the horizon. Hanwha Shipping, a U.S. subsidiary of South Korea’s Hanwha Ocean, is building an LNG carrier at its Philly Shipyard—the first export-ready U.S. vessel in decades. A second one might be in the works. But even this raises questions. How much of the ship is truly “U.S.-made”? Could parts be built overseas and assembled here to skirt the rules? The USTR’s definition of a domestic vessel remains murky, and clarity is crucial.
Innovation could also come from unexpected places. Advances in shipbuilding technology, like modular construction or automation, might help U.S. yards catch up. But these are long-term bets, and the USTR’s deadlines are looming. I can’t help but wonder if a phased-in approach—maybe starting with a lower percentage of U.S.-built ships—would give the industry breathing room to grow.
The Bigger Picture: Energy and National Security
This isn’t just about ships—it’s about America’s place in the world. Energy exports are a geopolitical tool, strengthening ties with allies and countering rivals. The U.S. accounts for 27.5% of global LNG demand and 9.5% of crude tanker demand, making it a heavyweight in the energy market. But if we can’t deliver on our promises, that influence wanes. Allies in Europe and Asia are counting on American gas to reduce reliance on less stable suppliers. Dropping the ball now could have consequences far beyond the shipyard.
Maybe I’m being optimistic, but I believe there’s a way to balance ambition with pragmatism. A mix of waivers, incentives, and strategic partnerships could bridge the gap while U.S. shipbuilding gets back on its feet. It won’t be easy, but when has anything worth doing ever been?
What’s Next for America’s Energy Ambitions?
As the USTR’s deadlines approach, all eyes will be on America’s shipyards—and its policymakers. Can we rebuild an industry from the ground up while keeping energy exports flowing? Or will we need to lean on waivers and foreign-built ships to keep the lights on? The answers will shape not just the economy but America’s role on the global stage.
- Invest in shipyards: Expand capacity and modernize facilities.
- Train workers: Address the skilled labor shortage with targeted programs.
- Clarify mandates: Define what “U.S.-made” means to avoid confusion.
- Explore waivers: Use flexibility to prevent export bottlenecks.
The road ahead is bumpy, but it’s not impassable. With the right mix of policy, innovation, and grit, America could turn this challenge into an opportunity. After all, if we can dream big enough to lead the global energy market, maybe we can build the ships to make it happen. What do you think—can the U.S. pull this off?
