Trump trade deal energy export wins at odds with tanker ship reality

The Trump administration is touting commitments by foreign nations for future large purchases of U.S. energy as part of recent trade deal frameworks, including with the EU, Indonesia, and South Korea, but a separate recent mandate from the U.S. Trade Representative to promote domestic shipbuilding may stand in the way of making those liquified natural gas shipments reality.

The USTR policy mandates that 1% of U.S. LNG exports be carried on U.S.-flagged ships starting in April 2028, and a year later, 1% needs to be transported on U.S.-built ships. Subsequent annual increases of 1% would reach a total of 15% of U.S. LNG required to be on U.S.-built vessels by 2047.

“The requirement of U.S.-built ships to move the country’s LNG and crude is problematic,” said Jason Feer, global head of business intelligence for Poten & Partners, a company specializing in energy market analysis and consulting, particularly in the LNG sector.

The U.S. government’s new shipbuilding policy was undertaken as part of an investigation into China’s dominance in the shipbuilding industry, as part of the broader national security concerns of the U.S. government (the Biden administration was pursuing the issue as well and released a report in January 2025 stating its recommendations). China manufactures as much as 75%-80% of global freight fleets. In April, Trump announced the new USTR policy to rebuild America’s shipbuilding industry.

On Capitol Hill, Senator Mark Kelly (D-AZ), Senator Todd Young (R-IN), Representative John Garamendi (D-CA-8), and Representative Trent Kelly (R-MS-1) introduced the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act to close the gap with international builders through a series of programs.

There is only one U.S.-flagged LNG vessel currently operating, Crowley’s American Energy, but it was made in France in 1994 and began service in March 2025 to carry LNG from the U.S. Gulf Coast to Puerto Rico. It is a Jones Act vessel, which means that, based on the 1920 maritime commerce law covering shipments between U.S. ports, it needs to be staffed by a U.S. captain and crew, and registered in the U.S., to be U.S.-flagged.

The current number of LNG carriers operating globally is 682, according to Poten & Partners. Only one of those vessels, the LNG Aquarius, was built by the United States. The LNG Aquarius was ordered on July 1, 1974, and delivered by General Dynamics on June 7, 1977. The vessel currently sails under the Indonesian flag, based on MarineTraffic vessel information.

By 2047, Poten & Partner estimates the U.S. would need 45 vessels to move the 15% of LNG required by the USTR guidelines. Currently, there is only one U.S. vessel on the global order books out of a total of 331 planned vessels, Feer said. On paper, he added, the number of LNG vessels on the order books “looks good” to support a U.S. energy export expansion. But under the new USTR guidelines, these vessels would not be eligible.

Hanwha Shipping, a U.S. subsidiary of South Korea’s Hanwha Ocean, is now building a domestic liquefied natural gas carrier through its affiliate, Hanwha Philly Shipyard. This vessel will be the first U.S.-ordered, export market-viable LNG carrier in almost 50 years. A second possible LNG vessel could also be ordered.

Based on the history of LNG shipbuilding, it takes approximately two and a half years for an LNG vessel to be built.

“Globally, you can build a lot of ships to support an expansion, but the problem is it has to be built in a U.S. shipyard, and the U.S. has not built a commercial ocean-going vessel in decades,” said Feer. “In that time, we have lost a lot of shipbuilding capacity, and the yards we have open are used for building Jones Act domestic ships and the Navy.”

Another hurdle, Feer said, is the constraints in hiring skilled labor. “There are not enough craft workers — pipefitters, carpenters, welders. Trying to build all of this, on top of a set deadline, is going to be a huge challenge,” he said.

The costs associated with that skilled labor will also be a factor. It costs around $260 million to build an LNG vessel, according to industry estimates. A U.S.-made vessel can be approximately two to four times more expensive. 

Feer says there needs to be more clarity on what constitutes a U.S.-made vessel within the USTR mandate.

“Could the majority of the vessel be manufactured overseas and completed in the U.S.? Is it a U.S.-made engine? How many of the LNG vessels made by Hanwha would be made in Korea and finished here? It is unclear how feasible the USTR mandate is,” he said.

Louis Sola, former Federal Maritime Commission Commissioner appointed by…