Dead in the Water: How America Killed Its Commercial Shipbuilding Industry And What It’s Costing Us

In 1943, American shipyards delivered 1,896 vessels in a single year. Today, the United States produces less than one percent of the world’s commercial shipping tonnage.That collapse didn’t happen by accident. It was chosen — incrementally, over fifty years of policy decisions that nobody ever described as a strategic choice about what kind of maritime nation America intended to be.Dead in the Water traces the full arc of that collapse: from the elimination of the Construction Differential Subsidy in 1981 through the Jones Act ceiling that preserved a domestic niche too small to sustain a competitive industry, to the demand signal failures that have left America’s mid-tier naval suppliers running at sixty to seventy percent capacity while the Navy falls further behind its own shipbuilding targets.Drawing on forty years of firsthand experience in American ship repair and naval manufacturing — from the shipyard floor to the executive suite — Patrick Shoup makes the case that America doesn’t have a capacity shortage. It has a mobilization failure. The yards exist. The workers exist. The supply chains exist. What’s broken is the policy architecture that would allow existing capacity to be mobilized when the country needs it.The result is a sealift fleet of 185 aging ships, a maintenance backlog twenty years deep, a submarine program producing at barely half its stated rate, and a naval industrial base that cannot mobilize what it already has — let alone what a conflict in the Western Pacific would require.China is not waiting. While America debates executive orders, China State Shipbuilding Corporation produced more vessels in 2024 alone than the entire United States shipbuilding industry has produced since the end of World War II — from the same yards that build its warships.The window to reverse this is open. The legislation exists. The funding mechanisms exist. The mid-tier industrial base that Arsenal of Democracy 2.0 described is still there, still capable, still waiting for the demand signal that would allow it to perform.Dead in the Water is the diagnosis, the history, and the policy case for what it would take to fix it — before the window closes.The companion volume to Arsenal of Democracy 2.0: Rebuilding America’s Defense Industrial Base. Read more