China’s Navy is Booming, the United States’ is Bottlenecked: The Case for Reauthorizing the Defense Production Act

In March 2025, President Donald Trump issued an Executive Order to Restore U.S. Maritime Dominance, directing the Department of Defense to leverage existing authorities to revitalize the nation’s maritime industrial base. This order arrives at a critical moment. As warships of the People’s Republic of China (PRC) proliferate and maneuver more aggressively across the Indo-Pacific, and as U.S. shipbuilders fall behind schedule and capacity, one thing is clear: the United States cannot meet its basic readiness requirements, let alone compete with its rivals, without revitalizing commercial shipyards. 

The Defense Production Act (DPA) represents a compelling solution, and grants the President significant power to expand industrial production and supply in pursuit of critical national defense objectives. By strategically investing in its commercial shipbuilding base through the DPA, the United States can strengthen maritime capacity and field more vessels overall. This in turn will help to ensure freedom of navigation, reinforce alliance commitments, and better deter adversaries at sea. But this opportunity can only be realized through immediate Congressional attention and close collaboration between the executive and legislative branches.

The PRC’s Military-Civil Fusion Has Built the World’s Largest Navy

A March 2025 Center for Strategic and International Studies report suggests that, through its ‘military-civil fusion’ (MCF) strategy, the PRC has integrated commercial and military production at many of its shipyards, giving its People’s Liberation Army Navy (PLAN) access to infrastructure, investment, and intellectual property acquired from commercial contracts. PRC policymakers have strategically prioritized MCF in shipbuilding for nearly 24 years, developing a robust dual-use shipbuilding sector. Most notably, the China State Shipbuilding Corporation (CSSC), a state-owned conglomerate and defense contractor, is now the world’s largest shipbuilding group. In 2024 alone, CSSC produced “more commercial vessels by tonnage than the United States has since World War II.” 

The PRC’s industrial economy and global trade networks enable this robust shipbuilding sector. Nearly 75 percent of CSSC’s dual-use shipyards produce vessels purchased by foreign firms, many of which are based in countries allied with the United States. ,  By ordering commercial vessels, these foreign purchases thus funnel billions of dollars and sensitive technologies into the PRC’s naval industrial base. Fueled by strategic intent, economic leverage, and industrial power, this surge has produced the world’s largest navy, expected to reach 400 ships in 2025. 

While critics may argue that quantity does not equal quality, quantity possesses a strategic quality of its own: in other words, capacity is capability. The PLAN, with more ships, is like a city with more fire stations. Even if many PLAN ships lack the size and sophisticated weapons systems of their U.S. Navy  counterparts, their sheer presence ensures faster responses, broader coverage, and greater resilience as well as redundancy.

The PLAN’s rapid expansion and transformation into the world’s largest navy (by ship count) directly undermines and challenges the U.S. Navy’s ability to remain dominant and resilient across the Indo-Pacific’s contested waters. As the 2022 National Defense Strategy outlines, the United States must maintain maritime dominance, uphold freedom of navigation, deter aggression from the PRC, and reinforce alliance commitments across the Indo-Pacific—the world’s most strategically consequential theater.  Without urgent action to revitalize naval production and maintenance capacity, the United States risks ceding operational advantage, weakening deterrence, and jeopardizing the credibility of its commitments in the region.

America’s Hollow Shipbuilding Base Cannot Keep Up

While the PRC has built the world’s largest navy through sustained industrial policy and state-subsidized dual-use production, the United States has neglected significant investment in all parts of its shipbuilding base. This includes public shipyards, which are government-owned and operated facilities, primarily used to maintain and modernize U.S. Navy vessels; private shipyards, which are privately owned by major defense primes and contracted by the Department of Defense for new ship construction or upgrades; and commercial shipyards, which serve the civilian market but can be adapted to support military needs like auxiliary and sealift vessels. This neglect has allowed the maritime industrial base to atrophy, leaving the U.S. Navy unable to keep pace while the PRC steams ahead.

Public Shipyards 

The United States emerged from World War II with 11 public naval shipyards, but a series of closures, beginning with the Brooklyn Navy Yard in the 1960s and accelerating through the Base Realignment and Closure processes of the 1990s, reduced that number to just four by the end of the decade. The consolidation of public naval shipyards from closures also resulted in the loss of over 70,000 skilled workers, shrinking the shipyard workforce by nearly 70% and cutting the infrastructure footprint by more than half.

Since the 1990s, the U.S. Navy’s four public shipyards—Norfolk Naval Shipyard, Portsmouth Naval Shipyard, Puget Sound Naval Shipyard and Intermediate Maintenance Facility, and Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility—maintain, repair, and modernize the U.S. Navy’s nuclear-powered fleet. These aging shipyards are, according to Naval Sea Systems Command, “unable to adequately sustain and optimize their facilities, utilities, dry docks, equipment, and information technology infrastructure,” resulting in higher maintenance costs, reliability issues, and delays. For example, in 2024, the Government Accountability Office reported that less than 40 percent of U.S. Navy ships completed maintenance on time. 

This decades-long neglect in sustained investment and consolidation of American public shipyards has not only strained the Navy’s ability to maintain its existing fleet but has also exposed a deeper structural weakness: the industrial base required to build new U.S. Navy ships is similarly brittle. 

Private and Commercial Shipyards

While public shipyards struggle under mounting maintenance backlogs, private and commercial shipyards, essential to expanding fleet capacity, face their own set of limitations. According to the U.S. Department of Transportation Maritime Administration and Government Accountability Office, of the 450 private shipyards across the country, only 154 are actively building ships, and just nine support the Department of Defense. 

Of these nine shipyards, most contracts are concentrated in the hands of defense primes like Huntington Ingalls and General Dynamics NASSCO, as well as Fincantieri Marinette Marine and Austal USA. These private shipyards face industrial base infrastructure and workforce limitations that make shipbuilding delays difficult to overcome. 

Challenges to industrial base infrastructure include: limited physical space, forcing shipyards to outsource work that would typically be handled in-house; aging facilities that hinder timely production; and capacity limitations due to specialized production capabilities that restrict the types of vessels built. Workforce limitations include difficulties with recruitment, retention, and skill development, compounded by a demographic shift away from manufacturing careers.

To address the shortcomings of private shipyards, the Navy’s FY2025 Shipbuilding Plan acknowledges that the commercial sector, which builds for the civilian market, could support naval production—particularly for auxiliary and support vessels, much like the PRC’s MCF strategy. However, while the PRC has successfully harnessed its commercial sector for dual-use capabilities through deliberate state investment, the United States cannot unlock similar advantages without a strategic commitment to modernize commercial facilities, expand the commercial workforce, and integrate commercial shipyards into naval production. Like their public and private counterparts, U.S. commercial shipyards suffer from underinvestment, aging infrastructure, and a depleted workforce, undermining their role in national defense. While the federal government once subsidized commercial shipbuilding and treated it as vital to national defense, now U.S. commercial yards produce only 0.1 percent of global output of ship tonnage, their lowest share in decades. This decline directly erodes the U.S.’s  ability to mobilize during crises or conflicts.

The Department of Defense’s Military Capabilities Requirements Studies outline the scope of the challenge. As of 2021, much of the U.S. auxiliary and sealift fleet will hit mandatory retirement over the next two decades, requiring a full recapitalization of dry cargo ships, tankers, cable layers, and roll-on/roll-off vessels. Despite this pressing requirement, the United States only possesses two commercial shipyards capable of constructing large, unlimited tonnage vessels essential for auxiliary, sealift, and other militarily relevant tasks: General Dynamics NASSCO in San Diego and Philly Shipyard in Philadelphia (now owned by South Korean Hanwha). This suggests that the U.S. commercial sector lacks the industrial means to replace its aging sealift fleet, undermining military readiness.

Without increased federal initiative to modernize and integrate commercial shipyards into defense production, the U.S. defense industrial base will further atrophy at a time when naval readiness depends on it. The looming recapitalization cliff across the auxiliary and sealift fleet cannot be met solely by overstretched public and private yards. 

Reauthorizing the Defense Production Act is a Strategic Imperative

Congress must reauthorize the Defense Production Act before it expires on September 30, 2025, to address U.S. shipbuilding challenges and close the growing gap in maritime capacity between the U.S. Navy and the PLAN.

First passed in 1950 during the Korean War, the DPA grants the President broad authority to ensure national defense by expanding and expediting the supply of materials and services from the domestic industrial base. Of its key authorities, the most relevant is Title III—Expansion of Productive Capacity and Supply—which enables the President to incentivize the domestic industrial base to expand the production and supply of critical materials and goods by means of  loans, loan guarantees, direct purchases, purchase commitments, and the authority to procure and install equipment in private industrial facilities. 

Since 1950, Congress has reauthorized the DPA over 50 times, most recently in the John S. McCain National Defense Authorization Act for Fiscal Year 2019. When fully leveraged, the DPA offers a legal and financial mechanism to reverse the decline of the U.S.’s  maritime industrial base and reinvigorate the commercial sector as a strategic partner for national defense. 

Title III gives the President a broad range of tools to invest in idle commercial shipyards and integrate them into military naval shipbuilding. For instance, under this authority, the federal government may provide grants or contracts to industry or educational institutions to develop skills critical to defense production. Additionally, it could fund training programs for specialized trades, such as welding, electrical systems engineering, and advanced manufacturing to reduce labor shortages. The government may also co-invest in facilities and equipment to train the workforce, such as simulators, certification labs, and trade school infrastructure. Policymakers can extend these Title III authorities to a wide network of subcontracted industries to further bolster supply-chain resilience. 

Therefore, reauthorizing the Defense Production Act in the National Defense Authorization Act for Fiscal Year 2026 is paramount to accomplishing President Trump’s recent Executive Order. The Administration is certainly aware of its potential; the Executive Order explicitly identified the DPA’s Title III as one option “to invest in and expand the Maritime Industrial Base.” Moreover, current Presidential Determinations under Title III—such as those supporting Submarine Industrial Base Production Capacity for the Virginia-class attack submarine program—demonstrate that the administration is already using the statute to shore up vulnerable parts of the defense maritime sector. These actions meet the DPA’s three statutory criteria, which mandate that: first, the resource or technology is essential to national defense; second, industry alone cannot meet the requirement in a timely manner; and third, Presidential action is the most cost-effective, practical solution.

By activating dormant industrial capacity through targeted federal incentives, the United States can use Title III authorities to invest in commercial shipyards, modernize facilities, and reorient them to support defense readiness with output such as auxiliary ships, sealift vessels, and modular support platforms—just as the PRC subsidizes commercial shipbuilding to support the PLAN. This process will take years, which is why action must begin now to ensure that the industrial base can meet future wartime demands before it is  too late.

Although the DPA aligns with the Trump Administration’s Executive Order and the recently introduced SHIPS for America Act, which focuses on expanding the domestic construction of U.S. Navy ships, Congress has paid little attention to a potential reauthorization of the Defense Production Act. If Congress fails to act, the United States would forfeit the ability to prioritize defense contracts, incentivize private sector participation, and surge production in crisis, further exacerbating U.S. shipbuilding challenges. 

A Window of Opportunity—But Not for Long

The United States has overcome industrial challenges before—for example, in mobilizing the Arsenal of Democracy during World War II—and must summon that same spirit through bold, bipartisan action to rebuild its commercial maritime strength today. Reauthorizing the Defense Production Act is a strategic necessity. Inaction will widen the industrial gap between the United States and the PRC, delay critical recapitalization, and risk forfeiting deterrence. Congress must act because delay is defeat, and capacity is capability in naval power. Just as a city cannot respond to fires with only a handful of aging stations, the U.S. Navy cannot meet growing demands with a hollowed-out and overstretched shipbuilding base. Revitalizing the commercial sector is essential to sustaining American naval strength.

Views expressed are the author’s own and do not represent the views of GSSR, Georgetown University, or any other entity. Image Credit: USNI