Steel Traps: America’s Fraught Quest for Maritime Dominance

Iiss | Jonathan Caverley, Peter Dombrowski

United States officials are pursuing an ambitious maritime-industrial policy to restore domestic shipbuilding and naval dominance through massive subsidies, regulatory policy changes, and trade leverage. The Trump administration has proposed a Golden Fleet featuring a new class of battleship alongside a Maritime Action Plan that includes the extension of the Finland Model for foreign naval vessel procurement.

These initiatives seek to replicate historical mercantilist trade theories and the rapid industrial growth models of mid-twentieth-century Asian developmental states. However, structural disadvantages such as high domestic steel costs and elevated manufacturing wages hinder American competitiveness. The overstretched domestic maritime sector faces severe maintenance backlogs and depleted munitions inventories following recent regional conflicts. Consequently, heavy investments in outdated surface combatants and commercial ship subsidies risk imposing substantial opportunity costs on overall naval capability while further entrenching Chinese market power.

Comment

Washington attempts to jump-start domestic shipbuilding through foreign-licensing frameworks like the Finland Model while neglecting severe structural cost disadvantages in American yards. Relying on Hanwha Ocean to upgrade Philadelphia infrastructure bypasses the absence of an integrated Tier-three supplier base necessary for high-rate warship construction.

This approach mirrors historical missteps in European state-subsidised yards during the 1970s, where capital infusions failed to overcome fundamental productivity gaps against established Asian competitors. Subsidising legacy surface combatants ultimately starves asymmetric capabilities of capital while accelerating industrial dependency on external supply chains.

Strategic Question for Discussion

How can the United States implement the Finland Model of foreign-licensed warship production without locking its domestic shipyards into permanent cost disadvantages against Chinese industrial scale?

The available evidence points toward persistent cost and workforce deficits that foreign licensing alone cannot resolve. Transferring initial designs to domestic yards will likely produce high-cost hulls unless underlying steel and sub-tier supply chain constraints are directly addressed.

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