Early this year, the office of the US Trade Representative (USTR) identified China’s maritime and shipbuilding dominance as a trade and national security threat. China, in essence, has displaced rivals, skewed competition and built risky dependencies that endanger US commerce and global supply chains, according to USTR.
Section 301 of America’s Trade Act authorises USTR to fix what it thinks is wrong. Based on its findings, Washington’s trade negotiator and watchdog has devised a set of sharply higher fees for Chinese-built and -operated ships docking in the US.
That’s not-so-good news for vessel builders like Yangzijiang. The company entered 2025 with clear ambitions: to secure US$5 billion in new orders, maintain its position as one of China’s top shipbuilders, and ensure full utilisation of its expansive yards along the Yangtze River. The reality so far has proved harsher than anticipated.
“Because of Section 301, ship owners are concerned. They’re waiting to see if US regulations will change before placing new orders,” Ren Yuanlin, Yangzijiang Shipbuilding’s de facto founder and biggest shareholder, tells The Edge Singapore.
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While he’s no longer running Yangzijiang Shipbuilding, having handed over the reins in 2020 to his son Letian, Ren, 72, is still keeping close tabs on the global maritime industry. By his reckoning, Yangzijiang Shipbuilding’s target of US$5 billion in new orders for this year is likely out of reach. It secured only US$0.54 billion worth of new projects in 1H2025.
The veteran businessman is not losing sleep over the shortfall, though. For one thing, ship owners looking to place new orders are hard-pressed to find alternative sources of supply, as yards in South Korea and Japan — China’s closest shipbuilding rivals — have acute challenges of their own.
These include labour shortages stemming from both countries’ shrinking populations, which in turn have curtailed their ability to innovate and driven up wage costs. Periodic worker strikes in South Korea are another bottleneck.
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Unlike automotive production, and aircraft manufacturing to some degree, shipbuilding is manpower-intensive and can’t be automated on a large scale, Ren points out. “There are three key ingredients in shipbuilding: technical know-how, capital and labour. The Korean and Japanese yards don’t have the last one. Shipbuilding is done outdoors, in the open. There are no production lines. It’s hard work, especially in summer.”
The same, he says, will apply for the US, where Trump is seeking to revive its sluggish shipbuilding industry with the help of South Korean yards. Seoul has agreed to lend a hand in exchange for tariff relief from Washington.
While USTR’s new port fees for Chinese vessels entering American waters are part of efforts to stop the dominance of China’s yards and bolster US shipbuilding, Ren believes any fallout will be temporary.
“Trump wants to revive shipbuilding in the US. It’s not doable. For every ship made in the US, I can make five in China. That’s the cost advantage we have,” he says. The stakes may also be too high for the US, politically.
“The US mid-term elections are coming up next year. I don’t think Trump wants to risk having inflation return in a big way to the US as a result of his tariffs, which will only make goods imported from China a lot more expensive.”
Even China’s ever-growing shipbuilding scene is no cause for concern for Yangzijiang, according to Ren. Two Chinese state-controlled shipbuilders completed their merger with each other in August, turning the new entity into the world’s largest vessel maker. China State Shipbuilding Corporation, as it’s called, makes commercial vessels as well as naval ships.
“Our orders are from foreign companies, and we don’t do military vessels. In any case, our profits are much higher than those of any state-owned yard,” says Ren.
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While Trump’s determination to keep China at bay has raised the stakes for global shipbuilding and everyone else in the value chain, one area of enduring strength for Yangzijiang Shipbuilding is the surge in demand for green vessels.
The UN-backed International Maritime Organization (IMO), which regulates global shipping, wants to achieve net-zero greenhouse gas emissions by 2050. Driven by IMO’s decarbonisation goals, ship owners are seeking vessels powered by alternative fuels and equipped with advanced emissions-reduction technologies. Yangzijiang Shipbuilding’s investment over the years in this space is paying off handsomely.
Eco-friendly vessels account for nearly three-quarters of the value of its current US$23.2 billion order book, which will yield 236 vessels to be delivered between this year and 2030.
“Yangzijiang’s pole position in shipbuilding will not change,” says Ren. “We have a full pipeline of projects. Our current shipbuilding orders will keep us busy all the way till 2030.”
Analysts seem to agree. DBS Group Research’s Ho Pei Hwa, who has a “buy” call and $3.80 target price on the stock, says the company’s current order book implies more than four years of revenue coverage.
UOB Kay Hian’s Adrian Loh, who has a “buy” call and $3.45 target price, notes that Yangzijiang Shipbuilding is hopeful of converting US$2 billion in signed letters of intent into contracts to be fulfilled in 2028 and 2029.
“Relatively poor order wins in 2025 and 2026 would only potentially hit 2028 earnings — a timeline that is arguably too far out for most investors to consider. Offsetting this is the fact that the company has earnings visibility for the next two years,” says Loh.
Yangzijiang Shipbuilding may be sailing into choppier waters, but with a bulging green order book and cost advantages that rivals can’t match, it looks set to stay ahead of the fleet. Tariffs may come and go, but its momentum, for now, looks tough to derail.
