UPDATE ON SHIPS FOR AMERICA ACT

Today the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act was re-introduced. This is comprehensive legislation to revitalize the United States shipbuilding and commercial maritime industries. It was introduced by Senator Mark Kelly (D-AZ), Senator Todd Young (R-IN), Representative John Garamendi (D-CA-8), and Representative Trent Kelly (R-MS-1). Other cosponsors in the Senate include Senator Lisa Murkowski (R-AK) and Senator John Fetterman (D-PA). Click here for the release. Our President & CEO, Roger Camp, is quoted in the release. Attached find social media resources to push out on your sources.

To maximize the changes of passage of the legislation, Senator Kelly and Young will introduce two separate pieces of legislation – one bill which is Titles 1-6 of the full bill and a second bill which is the tax title (Title 7). The versions of the bill are identical to the full SHIPS for America Act which will be introduced, in full, in the House. The press information is described as “SHIPS for America Act” – without differentiating between the two bills. Please see both bills attached, along with the consolidated bill which was released today.

When members of ASSA met with members of Congress earlier this year, we were invited to provide information to Senator Kelly’s office to strengthen the language that affects our members. The group provided tremendous input with Paul Roden leading the development of the attached white paper we shared with his office.

While they did accept some of our recommendations, unfortunately they did not include all recommendations. Sec. 501 includes several changes we recommend. We were looking for the critical components that had been part of law (National Defense Sealift Fund) since the mid-1990s, and their language prohibits use of the funds from procuring any components from a “foreign entity of concern.”  In our opinion this does not address the same concern as discussed in our white paper.  We do hope that this is enough to preserve the at-risk US manufacturing of critical components but believe that shipyards will likely continue to buy cheaper products from countries that heavily subsidize their shipbuilding suppliers.  We understand that going beyond the foreign entity of concern restriction was a bridge too far for some of the partner offices to go at this stage of the process. At this point, the FEOC language is the extent to which we will see a component restriction for now.

It is our understanding that the Administration opposed our recommended language that had been successfully used in the procurement of similar ships via the National Defense Sealift Fund.  Of course, it is disappointing to see that so much effort is being spent to bring manufacturing back to the US (i.e. via tariffs) while critical manufacturing sites in the US are being left at risk to low volumes, the global market, and subsidized foreign manufacturers. Despite this, we continue to support all legislation that supports the domestic maritime industry. We do think we can continue to follow up with Senator Young and Congressman Kelly to give them some additional background on the proposed language. We also just learned today that Senator Baldwin has agreed to co-sponsor the bill so this is more good news.

The circumstances that created the Buy-American language within the NDSF are very similar to what we’re facing today (e.g. declining US shipbuilding, evaporating US suppliers, and a need to build more commercial-like ships), which is why we had thought that this bill would be a good tool to assist in maintaining vulnerable US shipbuilding suppliers.