A Tale of Two Declines: The Collapse of British and American Shipbuilding

The USS Chung-Hoon (DDG-93) sliced through the choppy waters of the Taiwan Strait on 3 June 2023, her crew hypervigilant as she conducted a routine freedom of navigation transit alongside a Canadian frigate. Without warning, a Chinese warship veered across the Chung-Hoon’s bow at a dangerously close distance, forcing her to rapidly swerve to avoid a collision. The Chinese warship’s maneuver, deemed unsafe by the US Indo-Pacific Command, was just one in a series of increasingly aggressive encounters, demonstrating that the balance of power at sea is being tested.[1]

Nearly a decade earlier, then-Chief of Naval Operations Admiral John M Richardson warned, “For the first time in 25 years, the United States is facing a return to a great power competition…. Our competitors are moving quickly, and our adversaries are bent on leaving us swirling in their wake.”[2] His words ring truer with time, as traditional naval conflicts over sea lanes and territorial waters have expanded to encompass the seabed, space, cyberspace, and information environments. China’s rise as an economic and maritime competitor highlights the necessity for the United States to develop integrated, multidomain operations.

The launch of HMS Cambridge, an 80-gun third-rate ship of the line of the Royal Navy, on 21 October 1755 at Deptford, with the 100-gun first-rate ship-of-the-line the Royal George in the foreground.   John Cleveley

The Royal Navy of the 17th through the 19th centuries serves as a key precedent, as its strategies laid the foundation for modern naval tactics that still influence US strategy today. The most prominent lesson, however, is Britain’s investment in naval infrastructure, which allowed for a sustained global presence and expeditious fleet expansion when needed. By contrast, the US Navy today faces significant limitations in shipbuilding and maintenance infrastructure, with the number of major private shipyards declining from 11 to just 4 since the conclusion of World War II.[3]

The very strategies that once led to British and American maritime dominance are now informing China’s growing power. According to James R Holmes, a professor of strategy at the US Naval War College, China is drawing on traditional maritime theory – particularly Alfred Thayer Mahan’s ideas and Geoffrey Till’s modern interpretations – by focusing on fleet expansion, coalitions, control of choke points, and economic power.[4] The United States must adopt an integrated, multidomain approach and reinvest in its industrial base to counter China’s naval expansion and maintain a comprehensive strategic advantage.

Liberty ships SS Benjamin Harrison and SS Samuel Chase at Bethlehem Yard being fitted out in preparation for joining the Allied fleet. During World War II, the United States was an industrial powerhouse, churning out an average of three ships every two days. The base began to drop out following the war, when demand decreased and government contracts expired.     Office of War Information 

The rise and fall of US shipbuilding

In the late 19th and early 20th centuries, the United States emerged as a formidable naval power. US policymakers began to understand that maritime dominance was a strategic asset and foundation for national power. President Theodore Roosevelt championed this vision, driving large investments in naval expansion, modernising the fleet through mass construction of battleships, and establishing a global network of coaling stations and bases.[5] The 1907–9 voyage of the Great White Fleet symbolised a new era of American naval power, showcasing to the world the might of the US Navy.[6]

World War I further catalysed US shipbuilding expansion. The US Shipping Board, established in 1916, and the Emergency Fleet Corporation, established in 1917, were able to expedite US ship production to support Allied efforts.[7] By the end of the war, the US Merchant Marine had become one of the largest in the world, and the Navy had grown from a small coastal defense force into a full-fledged blue-water Navy.[8]

This trajectory continued into World War II, when the US shipbuilding industry reached its peak. Under the direction of the War Shipping Administration and the US Maritime Commission, American yards produced more than 5,000 merchant ships and more than 1,200 warships between 1941 and 1945.[9] The Liberty and Victory ships were built at an unprecedented rate, and, at its height, the United States was launching an average of three ships every two days, which was a feat unmatched by any nation before or since.[10] The US position as a naval and industrial superpower was cemented.

At the war’s conclusion, the United States emerged victorious, but its industrial base began to decline as vessel demand dropped, government contracts expired, and policymakers’ priorities adjusted to align with peacetime events. The Merchant Marine Act of 1920 (the Jones Act), which requires all goods transported between US ports to be carried on US-built, -owned, and -crewed ships, was a key factor in this dilapidation. While intended to support the US maritime industry, the long-term consequences were more complex: The Jones Act unintentionally minimised competition by limiting the growth of international shipping lines and stifling the expansion of a robust commercial fleet.[11]

In the years after the war, in addition to the Jones Act’s effect, shipping between US ports became a victim of the interstate and railroad systems. The United States saw a considerable reduction in the demand for merchant ships, leading to the entire maritime industry’s shrinking. A similar dynamic played out because of the Merchant Marine Act of 1936, which established shipbuilding subsidies but ultimately was undermined by inconsistent policies and chronic underinvestment.[12] Private shipyards began consolidating, and many closed or were absorbed by larger conglomerates. By the 1960s, global shipping companies from Europe and Japan managed to outpace the US fleet.[13]

In the decades that followed, increased privatization, reduced government investment in commercial shipbuilding, and a preference for international shipping left the United States with a slow-moving maritime industry. By the 1980s, naval experts warned of the consequences of this decline, and the industry and fleet were briefly revitalised by President Ronald Reagan’s 600-Ship Navy initiative. But, at the end of the Cold War, US shipyards experienced significant cuts. Four of eight public naval shipyards were shut down and the workforce dwindled to a record low of 21,000 personnel from a peak of 62,000.[14]

Having lost much of its shipyard capacity and workforce, the United States could no longer build ships at the rate necessary to support a sustained naval presence. During the Gulf War this became more apparent. Although the Navy played a critical role in the success of Operation DESERT STORM, it concurrently faced challenges in maintaining its shipbuilding schedules and keeping up with maintenance, weaknesses that persist today. To address these enduring issues, the United States must look back to industrial success stories, none of which are more historically significant than that of the British Royal Navy.

US and Allied ships sail in formation with Pacific partners as part of TALISMAN SABRE 25 in July 2025. Alliances are vital both militarily and industrially.      U.S. Navy (Cole Pursley) 

Britain’s shipyards, America’s lesson

For more than two centuries, the tides of global power rose and fell with the Royal Navy. From the 17th century onward, Britain experienced what historian C J Bartlett describes as a “long and rarely interrupted run” of “victories over the navies of France and Spain” as well as other European powers.[15] British maritime supremacy was the result of a layered and multifaceted strategy, with a key element being the nation’s commitment to expanding and maintaining its shipbuilding industry.

Paramount to that effort were the Royal Navy Board and Admiralty. Founded in the mid-16th century, these institutions developed an efficient bureaucracy that ensured sustained ship production and logistical support unmatched by any other European power. Most crucially, the Admiralty emphasised a large-scale shift from converted merchant vessels to warships designed specifically for combat, allowing improved maneuverability, durability, and firepower.[16] Britain was able to expedite mass production and mobilise quickly, giving it an edge over rivals.

Britain’s historical emphasis on a strong naval industrial base offers important lessons for the United States today. As China expands its People’s Liberation Army Navy, now the world’s largest fleet by hull count, the United States must reinvest in its own industrial base to compete. Although the United States has an advantage over the PLAN in the number of destroyers, which remain “the backbone of… surface naval warship strike groups,” China has more than doubled its destroyer fleet in just 20 years and is rapidly building cruisers.[17]

Even if the PLAN’s ships do not match the US Navy’s in quality, numerical superiority remains a significant advantage. According to professor and author Captain Sam Tangredi, research indicates that larger fleets won 25 out of 28 historical wars, because even if the larger fleet suffers major losses, it often is able to absorb them and continue fighting, triumphing over opponents with higher-quality ships.[18]

In addition, according to the Office of Naval Intelligence, China’s ship-design sector is using software and ship construction methods “comparable to those used at U.S. shipyards,” suggesting the current gap in quality between US and Chinese ships may be bridged soon.[19] A brief by the US Navy indicated China has as much as 230 times the shipbuilding capacity of the United States. In war, this advantage would allow China to repair or replace damaged vessels much more quickly than the United States, which “has faced significant readiness challenges over the last decade” and a considerable maintenance backlog.[20]

Coalition-building: A need, not a want

Though the United States currently may not be able to match China’s shipbuilding capacity, it has successfully formed alliances that mirror those made by Britain in the 17th through the 19th centuries. During this period, Britain understood the limitations of relying on its own resources to counter rivals and thus engaged in several partnerships that enhanced its position. These included the Anglo-Portuguese Alliance, which enabled Britain to access Portugal’s geographically strategic ports, and the Anglo-Dutch Alliance, which allowed dominance over Louis XIV’s France.[21]

Just as Britain cultivated partnerships that offset its rivals’ strengths, the United States has built a network of alliances to counter China’s growing naval power. The partnership among Australia, the United Kingdom, and the United States, for example, combines the capabilities of the three nations in the realms of nuclear-powered submarines and other emerging technologies.[22] The Quadrilateral Security Dialogue joins the United States with Japan, India, and Australia to promote a free and open Indo-Pacific. Chinese Foreign Minister Wang Yi called the Quad “a big underlying security risk,” a clear sign of its deterrent effect.[23] And NATO, though historically focused on the Atlantic, continues to play an important role in combined operations, including in the Pacific.

Alliances, such as NATO and AUKUS, and partnerships, such as the Quad, offer the United States its best chance at overcoming China’s growing numerical advantage, and maintaining positive relations with China’s neighbors likely will prove beneficial as well. Japan and South Korea each operate a substantial, modern fleet. If either of these forces were to join the United States in a conflict, the PLAN could quickly lose its numerical edge; however, integrating such forces presents challenges. Whether allies will join the United States in combat cannot be guaranteed, and effective coordination in war is difficult to achieve.[24]

Such alliances also are vital industrially, and the United States is making progress on this front. In 2025, Japan and South Korea accounted for 14% and 27% of global ship deliveries, respectively.[25] The construction of US naval ships by foreign shipbuilders initially seemed improbable because of current Buy America legislation that mandates 100% of Navy ships be manufactured fully in the United States.[26] However, under South Korea’s Make American Shipbuilding Great Again trade initiative, South Korean shipbuilders Hanwha Ocean and Samsung Heavy Industries have recently inked U.S. Navy ship-design contracts, partnering with US-based firms VARD and General Dynamics NASSCO, respectively.[27] Hanwha Ocean – which recently purchased Philly Shipyard – also is partnering with Leidos on next-generation naval ship design as well as expanding naval shipbuilding capacity in the United States.[28]

In the fiscal year 2027 budget, $1.85 bn is designated for two studies on future foreign frigate and destroyer design and construction. The study request specifically directs the Navy to consider Japanese and Korean shipyards and designs.[29] In addition, South Korean shipbuilder SK Oceanplant recently signed a master ship repair agreement with the US Navy, qualifying it to maintain, repair, and overhaul US ships.[30]

Another possible approach could include expanding exceptions under the International Traffic in Arms Regulations to allow civilian technology and industrial base members, as well as Japan and South Korea, to assist with vessel repairs and aid construction, which would relieve pressure on backlogged US yards while maintaining security thresholds. In addition, increasing allied interoperability through joint technology design and shared logistics infrastructure could help ensure the United States could respond quickly to future crises.

The decline of the Royal Navy

To regain its naval edge, the United States should examine not only the rise, but also the fall of the Royal Navy. Britain’s shipbuilding sector began its decline in the mid-20th century, accounting for less than 10% of global ship output by 1965 – a stark contrast to its 60% output as late as 1913.[31] Historical analysis suggests this decline stemmed from structural failures within the shipbuilding sector: inefficient practices, labor unrest, lack of innovation, and refusal to adopt more modern production techniques.[32]

A particularly relevant caution for the United States today is British industry’s conservatism toward adopting new technologies. Early 20th-century British shipbuilders generally lacked faith in scientists’ abilities to contribute to shipbuilding.[33] Britain’s resistance to modernisation, combined with disinvestment in shipyards, left its maritime industry uncompetitive in an evolving global economy, and its maritime influence diminished.

Maritime competition now spans cyber warfare capabilities, AI-assisted decision-making, autonomous systems, and space-based intelligence and surveillance platforms, and the United States must adjust accordingly. Without a coordinated effort to integrate these technologies, the Navy risks building a fleet that looks formidable on paper but cannot sustain itself in conflict.

That said, naval dominance depends not just on hardware or digital infrastructure but also on integration among Services, domains, and international partners. The United States must reinvest in its industrial base, deepen the alliances that multiply its naval power, and embrace the technological integration that modern competition demands. If the United States does not examine the past, it risks repeating strategic missteps and missing opportunities to adapt. Britain’s decline was not caused by a single event but by gradual obsolescence, and the United States must recognize this before it experiences the same fate.

This article originally appeared in the U.S. Naval Institute Proceedings. Copyright U.S. Naval Institute. Reprinted with permission. For more great content from the U.S. Naval Institute, visit www.usni.org.

References

[1] ADM Samuel J. Paparo, USN, “USINDOPACOM Statement on Unsafe Maritime Interaction,” US Indo-Pacific Command, 5 June 2023.

[2] ADM John M. Richardson, USN, “A Design for Maintaining Maritime Superiority, Version 1.0,” Office of the Chief of Naval Operations, January 2016.

[3] CDR J. J. Meyer Jr., USN, “Our Nation’s Shipyards,” U.S. Naval Institute Proceedings 90, no. 11 (November 1964).

[4] James R. Holmes and Toshi Yoshihara, Chinese Naval Strategy in the 21st Century: The Turn to Mahan, Routledge Series: Naval Policy and History (London: Routledge, 2007).

[5] CDR Thomas G. Kolwicz Jr., USN, “Theodore Roosevelt, Naval Expansion, and Guaranteeing Peace,” Naval History 34, no. 4 (August 2020).

[6] Naval History and Heritage Command, “Sailors, Steelships, and Diplomacy: World Cruise of the Great White Fleet,” National Museum of the U.S. Navy, 2022, www.history.navy.mil/content/history/museums/nmusn/explore/prior-exhibits/2022/great-white-fleet.html

[7] Naval History and Heritage Command, “WWI: Ship Construction,” National Museum of the U.S. Navy, www.history.navy.mil/content/history/museums/nmusn/explore/photography/wwi/wwi-convoys/ship-construction.html

[8] Maritime Administration, “The Maritime Administration’s First 100 Years: 1916–2016,” U.S. Department of Transportation, www.maritime.dot.gov/history/historical-documents-and-resources/maritime-administration%E2%80%99s-first-100-years-1916-%E2%80%93-2016.

[9] John G. Bunker, Liberty Ships: The Ugly Ducklings of World War II (Annapolis, MD: Naval Institute Press, 1972).

[10] Congressional Budget Office, The Capacity of the Navy’s Shipyards to Maintain Its Submarines (Washington, DC: Congressional Budget Office, March 2021).

[11] Joshua Polk, The Jones Act: A Disastrous Legacy for the U.S. Economy and Security, Pacific Legal Foundation, 21 February 2025.

[12] U.S. Department of Transportation, “Shipbuilding Program—U.S. Maritime Commission.”

[13] Edward H. Lorenz, “An Evolutionary Explanation for Competitive Decline: The British Shipbuilding Industry, 1890–1970,” The Journal of Economic History 51, no. 4 (December 1991): 911–35.

[14] U.S. Department of Transportation, “Shipbuilding Program—U.S. Maritime Commission,” Maritime Administration, www.maritime.dot.gov/history/shipbuilding-exhibit/shipbuilding-program-us-maritime-commission.

[15] C. J. Bartlett, Great Britain and Sea Power, 1815–1853 (London: Longman, 1975); and Ivan Janžekovic, “The Rise of State Navies in the Early Seventeenth Century: A Historiographical Study,” Journal for Maritime Research 22, no. 1–2 (2020): 183–208.

[16] Edward J. Marolda, “Weathering the Storm,” Naval History 35, no. 1 (February 2021).

[17] “Naval Vessel Register, U.S. Navy Battle Force Ship List” (Washington, DC: U.S. Department of the Navy, accessed 2024).

[18] CAPT Sam J. Tangredi, USN (Ret.), “Bigger Fleets Win,” U.S. Naval Institute Proceedings 149, no. 1 (January 2023).

[19] Office of Naval Intelligence, China: Naval Construction Trends vis-à-vis U.S. Navy Shipbuilding Plans, 2020–2030, Farragut Technical Analysis Center, Naval Platforms Department, 6 February 2020; Office of Naval Intelligence, “Comparison of U.S. Navy and PLA Navy Shipbuilding Capacity, Ship Count, and Overall Tonnage,” unclassified graphic, U.S. Navy, maritime-executive.com/editorials/china-s-navy-is-using-quantity-to-build-quality.

[20] Office of Naval Intelligence, China: Naval Construction Trends; and Office of Naval Intelligence, “Comparison of U.S. Navy and PLA Navy Shipbuilding Capacity.”

[21] Treaty of Perpetual Alliance Between England and Portugal, 16 June 1373, E 30/275, National Archives; and Sanjay Subrahmanyam, The Portuguese Empire in Asia, 1500–1700: A Political and Economic History (London: Orient Group UK Ltd., 1993).

[22] Australian Strategic Policy Institute, “AUKUS: Strengthening Australia’s Defence and Regional Stability,” www.asa.gov.au/aukus.

[23] Ken Moritsugu and Mari Yamaguchi, “China Blasts US, Japan Rhetoric Ahead of Quad Summit,” Associated Press, 24 May 2022.

[24] Australian Strategic Policy Institute, “AUKUS: Strengthening Australia’s Defence and Regional Stability”; and Vijay Sakhuja, “Japanese Maritime Self Defence Force: Kata and Katana,” Strategic Analysis 24, no. 4 (July 2000), Columbia International Affairs Online.

[25] Clarksons Research, “Global Shipbuilding Completions and Market Share Indicators for 2025,” Clarksons Shipping Intelligence Network, March 2026.

[26] Ian Storey, “Naval Modernisation in China, Japan and South Korea: Contrasts and Comparisons,” in Naval Modernisation in South-East Asia, 1st ed. (London: Routledge, 2013), 14.

[27] Han Ye-na, “Hanwha Ocean, Samsung Heavy Industries Secure U.S. Navy Ship Design Contracts,” The Chosun Daily, 1 April 2026.

[28] Jodesz Gavilan, “Hanwha Ocean and Leidos Partner on Next-Gen U.S. Navy Ship Design,” Defense Post, 29 April 2026.

[29] Sam LaGrone and Mallory Shelbourne, “U.S. Considering Foreign Designs, Shipyards for New Navy Frigate, Destroyer Work in $1.85 B Study,” USNI News, 24 April 2026.

[30] Naval News Staff, “SK Oceanplant Launches ROK Navy’s Fourth FFX Batch-III Frigate, ROKS JeJu,” Naval News, 29 April 2026.

[31] Lloyd’s Register of Shipping, Annual Shipbuilding Return (London: Lloyd’s Register, 1950).

[32] Lorenz, “An Evolutionary Explanation for Competitive Decline,” 911–35.

[33] Sidney Pollard and Paul Robertson, The British Shipbuilding Industry, 1870–1914, Harvard Studies in Business History, vol. 30 (Cambridge, MA: Harvard University Press, 1979), 148.