(Yicai) April 19 -- The latest investigation by the US government into China's maritime, logistics, and shipbuilding industries could alter the business environment and competitive landscape of the global shipbuilding sector, according to a Chinese lawyer.

The probe is highly political, driven not only by the dynamics of rivalry between the two nations but also influenced by this year's presidential election in the United States, the person, who has extensive experience in international trade disputes, told Yicai.

The Office of the US Trade Representative initiated the probe on April 17, alleging that China uses “unfair, non-market policies and practices” to dominate the global shipbuilding industry. The US wants higher fees for China-made vessels docking at US ports and a revitalization fund for the local shipbuilding industry, thereby increasing demand for US-made ships.

Investigations of this nature must be completed within 12 months. For example, a previous Section 301 investigation was finished in seven months in 2018. So the upcoming report could be released around the time of the US presidential election in November, with the poll likely determining the direction and intensity of the investigation's measures, the lawyer added.

“We'e currently studying the situation, and the overall response is lukewarm,” said a representative of a shipyard in the Yangtze River Delta, adding that the key for both ship builders and shipowners is to see what measures the US ultimately takes.

If that involved additional tariffs, it would only affect orders from US ship operators, but at the moment “there aren't many American orders to begin with, accounting for single-digit percentages,” the person noted.

The US shipbuilding industry makes up less than 0.1 percent of the global market, according to a report by consultancy Clarksons. Its shipyards are working on only 25 orders (excluding military vessels), for a total of 232,000 gross tons. Ships built in the US are up to five times more expensive than those made in Asia, the report added.

Globally, the sector is dominated by China, Japan, and South Korea. From January to February, completed vessels, new orders, and order backlog in China accounted for 57 percent, 70 percent, and 56 percent of the global market, respectively, per the China Association of the National Shipbuilding Industry.

For American shipowners, Korean shipyards are currently the main partners. According to Clarksons, US owners are waiting for nearly 130 ships, or 6.6 million gross tonnage, to be finished and South Korean builders make up 30 percent of the orders based on tonnage. Among all the ships that have docked at US ports since last year, China-made vessels rank fourth.

Editor: Emmi Laine