WASHINGTON, D.C.: The U.S. government has concluded that China employs unfair policies to dominate the global shipbuilding, maritime, and logistics sectors, according to sources familiar with the findings of a months-long trade investigation.

The investigation, initiated by U.S. Trade Representative Katherine Tai in April 2024 at the request of labor unions, cites China's use of government subsidies, barriers to foreign firms, forced technology transfers, and procurement policies to gain an edge in shipbuilding. A source noted that China "severely and artificially suppressed labor costs" in these industries, further contributing to its dominance.

China's share of the $150 billion global shipbuilding market rose from 5 percent in 2000 to over 50 percent in 2023, while the U.S. share has fallen below 1 percent. South Korea and Japan remain the next most prominent players.

The report, set for release later this week, follows a public comment period and paves the way for potential U.S. tariffs or port fees on Chinese-built vessels. Labor unions backing the investigation have advocated such measures to counteract China's influence.

"China's targeting of the maritime, logistics, and shipbuilding sectors for dominance is the greatest barrier to revitalizing U.S. industries in these sectors," the report states, according to excerpts shared with Reuters.

The findings come as President Joe Biden's administration prepares to hand over to President-elect Donald Trump, who has vowed to continue imposing tariffs on Chinese goods. Trump has criticized China's dominance in commercial and military shipbuilding, calling it detrimental to U.S. interests.

Trump's incoming national security adviser, Mike Waltz, has been a vocal advocate for revitalizing U.S. shipbuilding. He co-authored a bipartisan bill with Senator Mark Kelly aimed at strengthening the domestic shipbuilding industry.

Experts agree that rebuilding U.S. shipbuilding will require decades of investment and cannot rely solely on tariffs. Scott Paul, president of the Alliance for American Manufacturing, described the findings as compelling but warned of a long road ahead.

"This is not going to be a quick fix," Paul said. "We need significant efforts to stop the erosion of our industrial base and grow it again."

China denies allegations of unfair practices and maintains that its industrial policies are lawful. Meanwhile, the U.S. faces growing demand for civilian and military vessels but has only 20 active shipyards, a steep decline from over 300 in the early 1980s.