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“While $20 billion is a lot, it’s not a huge amount, but it will give an incentive to fortify the infrastructure to build ships and that capability is definitely missing in the US,” a steel plate distributor said.
“The raw material in a $20 billion investment won’t be much but it’s a lot more than anyone did in the past. I’d guess it will amount to $2 billion over several years. So while it won’t move pricing or demand much, the psychological impact is huge,” he said.
“It also represents an about-face in thinking about shipbuilding. The change in direction is worth so much more than $20 billion. The momentum it is creating is priceless,” the distributor said.
A steel plate buyer also offered a positive view on the investment, saying, “It seems like a huge investment. I am not sure what it equates to from a tonnage perspective. Shipbuilding uses a lot of steel [per ship].”
The distributor also praised the string of announced and pledged investments in the US economy that President Donald Trump has highlighted in press briefings from the Oval Office.
“So far there’s been [nearly $2 trillion] in investments announced by President Trump,” the distributor said. “When has that happened in recent history?”
On Wednesday March 12, the White House identified $1.8 trillion in an incomplete list of investments, including $500 billion from Apple, $500 billion from an artificial intelligence infrastructure joint venture from Softbank, OpenAI and Oracle, $100 billion from Taiwanese chipmaker TSMC, $27 billion from Eli Lilly and $20 billion from DAMA Properties to build data centers — plus $600 billion in unspecified investments pledged by Saudi Arabia.
Rodolphe Saadé, chairman and chief executive officer of Marseilles, France-based CMA CGM, met with Trump in the Oval Office on March 6 to announce his company’s $20 billion investment plan that he said includes the shipbuilding of container vessels and an increase in the company’s US flag vessels from 10 to 30 ships, promising to unveil more details in the coming weeks.
“Over the next four years [we will] strengthen our partnership with American customers and public authorities,” the CEO said.
CMA CGM currently operates in 40 states, employs 15,000 workers and transports over 5 million shipping containers each year.
The company plans to open state-of-the-art warehouses, establish an automotive logistics platform and create an air cargo hub in Chicago.
The CMA CGM investment is part of Trump’s effort to restore the US as a major shipbuilding power.
On March 4, Trump told the Joint Session of Congress that he will be creating a new Office of Shipbuilding in the White House and plans to issue an executive order to boost US shipbuilding.
Matthew Paxton, president of the Shipbuilders Council of America, said Trump’s comments to Congress on shipbuilding were “a monumental moment” for the industry.
The Wall Street Journal reported on March 6 that a reading of a draft summary of the expected executive order on shipbuilding revealed it includes proposed fees on China-built ships calling at US ports that would be used to invest in US maritime sector.
When queried on Thursday March 13, however, the White House declined to provide any of the details that might be included in the forthcoming executive order.
“President Trump has long discussed rebuilding America’s shipbuilding capabilities. The White House, however, does not have any formal announcements to make at this time,” a White House source told Fastmarkets.