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NYK Line executive says Japan and Korea will struggle to meet US demand for non China shipbuilding.

A top Japanese shipping executive told reporters on Monday that U.S. allies Japan, South Korea and Canada would have a difficult time accelerating shipbuilding in order to meet the U.S.'s demand for alternative ships under Donald Trump's plans to impose port charges on China-linked vessels.

The Trump administration has drafted an executive order to revitalize domestic shipbuilding, and weaken China’s grip on this industry.

Takaya Soga is the CEO of Nippon Yusen, Japan's biggest shipping line. He said that Japanese shipbuilding has reached near capacity and there will be little room for expansion before 2028. Shipbuilders in South Korea as well as the U.S. face financial challenges.

The capacity of Japanese shipbuilding will be almost full until 2028, say. Soga said on the sidelines at the Singapore Maritime Week.

Soga also said that expansion of South Korean shipbuilders is not imminent as they have "suffered a very poor financial situation" for almost two decades.

Soga stated that the U.S. shipbuilders require both technology and investment to increase their capacity.

According to a draft of a fact sheet, Trump's order will create a Maritime Security Trust Fund and shipbuilding incentives via tax credits, grants, and loans.

According to the Center for Strategic and International Studies, 90% of all global shipbuilding is done in China, South Korea and Japan. Chinese shipbuilders now account for more than half of the merchant vessel cargo capacity. This is up from just 5% in 1999. They have gained market share from their Asian neighbors. (Reporting and editing by Sharon Singleton; Sudarshan Varadhan)

(source: Reuters)