Buying American can help keep the Philly shipyard afloat

Buying American can help keep the Philly shipyard afloat
Peter Navarro June 29, 2018

On Saturday, the largest container ship ever built in the United States will be christened. At 850 feet long, it is a testament to the capabilities of Philadelphia Shipyard, where it was constructed, and a fitting tribute to Daniel K. Inouye, for whom the ship will be named. Inouye’s story is a classic variation on the American Dream. Born to Japanese immigrants at the height of anti-Japanese sentiment in America, Inouye received the Medal of Honor in World War II and earned a seat in the United States Senate, where for 50 years he championed the American maritime industry, earning himself admirers across the partisan divide.

Another important and quintessentially American story contextualizes today’s christening – that of the United States commercial shipbuilding industry’s rebirth. In an era when most commercial ships are built in subsidized foreign yards and operated by low-wage foreign mariners, the Inouye defies the international norm. It was built by more than 600 members of the AFL-CIO Metal Trades Department in Pennsylvania.

President Trump avows two simple rules: “buy American” and “hire American.” The Inouye is the product of the two buy American, hire American laws in the maritime domain: the Jones Act and cargo preference.

The Jones Act, formally the Merchant Marine Act of 1920, requires that any vessel transporting merchandise between two points in the United States be built, owned, and crewed by American citizens. In the Inouye’s capacity as a Jones Act vessel, its “Aloha Class” massive size will be utilized on long-haul routes between the continental United States and Hawaii.

Featuring environmentally friendly technologies and new engineering innovations, the Inouye, along with her sister ship scheduled for completion in 2019, will have some of the lowest operating costs of any United States merchant ships. Even so, without the Jones Act, high-quality, relatively low-cost, environmentally conscious ships such as the Inouye would be priced out – and wiped out – of the domestic market by cheaper, often heavily subsidized, foreign vessels.

Lending further support to the financial viability of the Inouye, cargo preference statutes require that 50 percent of all cargoes procured with United States taxpayer dollars by civilian government agencies be transported on United States-flagged ships. For U.S. military cargo, the requirement reaches 100 percent. Under the cargo preference requirements, the Inouye will perform critical work for the Department of Defense, transporting equipment and supplies between the mainland and United States installations in the Pacific.

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