I was shocked to hear this so I did some research. As it turns out, it has a lot to do with foreign subsidies, similar to solar power.
Apparently up until 1981, the US had the Construction differential subsidy program [1][2] that subsided shipbuilding construction. During the Regan administration, the US eliminated subsidies whereas countries in Asia did not. Now the top 10 shipbuilding countries are in China, Korea, or Japan [3][4].
Outside of a few exceptions, such as a 1920 law forcing US-based natural gas to only be transported on American made/manned ships [5], the US shipbuilding industry has one customer: the military. Without additional subsidies it's unlikely the US can effectively compete with places like China, which continue to increase subsidies for shipbuilders [6].
In this political climate (especially post-Solyndra, post ethanol-subsidy) I think it's unlikely the federal government would increase subsidies for a private industry. On one hand, this might not be a bad thing: Chinese-subsidized industries don't always work out the way they planned (e.g., the construction of ghost towns). However if the military doesn't keep the industry up-to-date technologically, a shipbuilding tech gap could form, which might impact national security.
The U.S. is so far ahead of the rest of the world in almost all defense technologies that it's a hard pill to swallow politically that there could be one relatively-small segment (non-nuclear surface warships) that we'd be better off actually buying from our closest allies.
We export so much defense equipment to our allies, that you'd think it would be okay to maybe possibly import one thing that's built better and cheaper elsewhere. But no, we'd rather subsidize our shipyards to continue churning out ships designed in the 1980s...
The '1920 law' aka 'Jones Act' is not limited to natural gas. It deals with transport of goods where both the source and destination are American ports.
Apparently up until 1981, the US had the Construction differential subsidy program [1][2] that subsided shipbuilding construction. During the Regan administration, the US eliminated subsidies whereas countries in Asia did not. Now the top 10 shipbuilding countries are in China, Korea, or Japan [3][4].
Outside of a few exceptions, such as a 1920 law forcing US-based natural gas to only be transported on American made/manned ships [5], the US shipbuilding industry has one customer: the military. Without additional subsidies it's unlikely the US can effectively compete with places like China, which continue to increase subsidies for shipbuilders [6].
In this political climate (especially post-Solyndra, post ethanol-subsidy) I think it's unlikely the federal government would increase subsidies for a private industry. On one hand, this might not be a bad thing: Chinese-subsidized industries don't always work out the way they planned (e.g., the construction of ghost towns). However if the military doesn't keep the industry up-to-date technologically, a shipbuilding tech gap could form, which might impact national security.
[1] http://en.wikipedia.org/wiki/Long_Range_Shipbuilding_Program
[2] http://www.marinelink.com/article/shipbuilding/the-future-am...
[3] http://www.marineinsight.com/marine/marine-news/headline/top...
[4] http://thediplomat.com/2012/11/u-s-navy-take-notice-china-is...
[5] http://www.foxnews.com/us/2013/09/20/boom-in-natural-gas-pro...
[6] http://www.reuters.com/article/2013/12/09/us-china-shipping-...