Sea Control - Sea Control 591: Maritime Statecraft and Its Future with Steve Brock and Hunter Stires

Episode Date: December 2, 2025

Links1. "Maritime Statecraft and its Future," by Steve Brock and Hunter Stires, CIMSEC, October 21, 2025.2. "SECNAV Del Toro Calls for a New, Bold Maritime Statecraft in Era of Intense Strategic Competition," Department of the Navy, September 23, 2023. 

You're listening to Sea Control, hosted by the Center for International Maritime Security. Ahoy, shipmates, and welcome back aboard Sea Control. I'm your host, Brian Kerg, and our guests today are Steve Brock and Hunter Stiers. We're discussing their recent article, Maritime Statecraft and Its Future, which was published with CINSEC on 21 October 2025. As a reminder, all views expressed are personal and do not necessarily reflect the views of the Department of Defense or any other organization with which we are affiliated. Gentlemen, welcome aboard Sea Control. Can you tell us a little bit about yourselves and your professional backgrounds? Steve, let's start with you, please. Thanks so much, Brian. It's great to be here, and I really appreciate the opportunity. I graduated from the Naval Academy in 1990, did 28 years in the U.S. Navy, and then most recently had the honor of working as a pointee for the 78th sector of the Navy as a senior advisor in the Pentagon for the Biden administration and have post-Biden administration continue to work on these issues in advanced maritime statecraft as a private citizen in every way that we can.

Thank you, Steve. Hunter, please. Thank you, Brian. Terrific to be back on this MSEC podcast. And so my most recent role, I served as the American strategist for the Secretary of the Navy, working for Secretary Carlos del Toro, and I have the privilege of working for Steve. We had a lot of fun in developing and then implementing the American Statecraft Strategy. um other affiliations um you know with uh so recently named a senior fellow at the center for maritime strategy with the navy league and uh project director of the naval institute's maritime counterinsurgency project um over in proceedings which i would note brian uh was part of the launch of of that essential project um with uh his article dead men tell no tale so by all means uh you know uh can't resist the shameless plug for that excellent piece of writing so uh uh brian great to be with you uh gentlemen thanks so much for being here and

hunter uh you speak my love language which is uh praising me for my own work so thank you very much for that uh but no it's an absolute honor and i can only imagine uh the exciting times it was when you both had the opportunity to get snatched up and get told like hey develop help me develop a maritime statecraft strategy and just execute with aplomb. It's an impressive body of work. And that's what we're going to talk about today in tandem with the article. So turning back to that, gents, can you walk us through the big blue arrows of the article's core thesis? Like, Steve, we'll start with you if we could. How would you describe the elevator pitch? So when I originally came on, actually, even before I came on, as we worked on the Secretary's

confirmation hearing and as we planned out what we were going to try to achieve. Obviously, trying to tackle the Navy's biggest challenges. Brian, can you? And it was quite obvious that we could do something about being behind in every shady that America needs. Why not tackle the problem that hadn't been tackled? And that is the fact that we were the only country in the world that built, you know, only combatants in naval yards and we have no real commercial shipbuilding capability.

there's never been a great naval power that wasn't also a shipping and chip building power so the thesis of it really is um you got to have a maritime ecosystem you got to have the things that we've uh abandoned over the last four decades uh and you've got to basically have that whole system come back uh to able to to sort of uh get out of the get out of the forest of uh and and see the forest you know outside and see what we need to do to fix shipbuilding and uh the other kind of big theme that i'm sure hunter's going to hit on right after me here is you got to go to who knows how to build ships and have them come help you because we have a competitor right now.

The first time we've had this kind of full spectrum maritime competitor probably, you know, in 150 years. And so we need to get after it. Okay. That's a, that's a great wrap up. Hunter, I understand. You're eager to add on to that, please. Absolutely. So I, I would characterize the article as having, you know, The essential thesis of the piece and really the thesis of the strategy, if you really think about it, it boils down to kind of two essential elements, which is that if you look over the past 40 years of American Naval Shipbuilding, where the 40 years, you might say, in which the wheels came off, what has really happened? You have seen, first of all, the active disinvestment by the United States and the U.S. government from a longstanding system of supporting both commercial as well as naval shipbuilding, but particularly on the commercial side to make sure U.S. shipyards have long been uncompetitive relative to foreign counterparts because American labor is more expensive for a variety of different reasons. But the US government had a, you know, a imperfect but workable system by which we supported the competitiveness of American commercial shipbuilding. And, you know, starting in 1981, the US government basically walked away from all of that. And, and there, you know, very directly after after that period of time, the American commercial shipbuilding died.

And shortly thereafter, with the end of the Cold War, the Cold War seems to render this decisive verdict that capitalism is a superior system to communism, and market competition, may the best idea win, is just generally a better way to do things than a centralized planet. And as soon as we win the Cold War, we basically systematically get rid of all of that competition, a.k.a. capitalism, that we had in not just shipbuilding, but really the broader defense procurement landscape. And so these twin developments, and we argue in the opening of the piece, these are really monumental strategic errors. And I love this quote by

Colin Gray that we start off with, which is that a tactical mistake might kill you tomorrow. An operational mistake might kill you next week. But a strategic error in statecraft or strategy, It might take years, if not decades, to reveal itself in its full horror. And here we are. And so the purpose of maritime statecraft is to say, okay, how do we get to, you know, we know what a healthy sea power ecosystem looks like, which has competition, where you have a system where primarily, you know, generally speaking, it's healthier if you have more commercial shipbuilding than naval shipbuilding, and then the Navy gets to kind of come along

for the ride. It's a much less expensive way to do business that the Navy has to pay for everything all by itself. And so we know that's healthy. And we also know competition, capitalism works. And so the question becomes, how do you then bring back healthy competition and that dual use business model of both naval and commercial? And so the way that we saw as the way to kind of go about this and you know my my own entry into the story i mean you know so steve talked about in terms of helping with uh secretary del toro's confirmation hearings i mean my my own thinking on this for me started when i was working you know distantly in on the corporate side of the maritime industry back in like 2019 uh into 2020 and then eventually started putting things on

paper for some work for n7 and then um our wonderful colleague um brent sadler created an opportunity um to introduce um connected steve and me along with cno gilday on the rooftop of his think tank and that was when and basically you know the the three subjects that i brought to brought to that conversation were okay so maritime it was right after the launch of the maritime counterinsurgency project in the july 22 issue of the naval institute proceedings so i was putting That work in front of Steve and the CNO, along with some of this thinking about how do we kind of bring back some of that competition and bring the value to the Navy of bringing back, throwing our political weight behind bringing that commercial shipbuilding back to the United States and seeking to re-inject competition into the shipbuilding market. And then the other was, was, hey, let's go feel the capability to reload vertical launch systems at sea. And so it was from that conversation that, that Steve and I started to collaborate. And, you know, eventually, we, we worked together to put, put this forward to Secretary del Toro, Steve, Steve put it in front of him. And, and then from there, Steve and the secretary, you know, started moving out. Eventually, they brought me on the team, which was really, really fun. And then off we went. So I think that but again, that coming back to that central thesis of the strategy that you need to have, you know, bring back competition, bring back the dual use business model.

And the most direct way we saw how to do that was basically, let's go to our allies in Korea and Japan and elsewhere around the world who are good at this, who know how to build very good warships, who know how to make money building commercial ships, and let's get them to come and invest in America. I guess there's all kinds of good reasons why we can't, why we don't and should not outsource warship production overseas. So it essentially comes down to, you know, Steve and I would be talking in his office that, you know, in the in the earring of the Pentagon. And and, you know, we'd be talking about, you know, it's basically the story of the Mulberry Harbors of, you know, back back in World War Two. the lead D-Day naval planner after the failure of the Dieppe raid basically said well if we cannot capture a port

we must take one with us and so basically as we were kind of looking at each other we were like well if we cannot outsource shipbuilding and shouldn't outsource for all kinds of good reasons technical security

strategic vulnerability things like that then we must bring our world-class shipbuilding allies to us and so that's what we then set out to do and it's been really really gratifying to see the success of this approach in bringing world-class investment to American shores. I really appreciate that breakdown. And that really helps lean us into some of the problem framing beyond just the thesis of the article. And what I'd offer is a casual reader of Naval

Affairs, and they're looking at the problems that you gentlemen were just speaking about, they might simply know that the U.S. doesn't have enough ships. They see like China's got all these ships, they're building more, their capacity is doing this. And you look at the our graph and their graph is getting bigger and bigger and our graph is getting relatively smaller and smaller so ipso facto us needs more ships the end is what the the layman probably takes away from this conversation just skimming the headlines right uh but but hunter as you just explained the problem is far more complex than that as is solving it uh and so the way you phrase in the article is that the entire american sea power ecosystem is out of balance so so hunter you kind of bled with

much of that so far, I think. Steve, if we could turn it over to you for a moment, is there anything else you want to build on to explain why that ecosystem is out of balance? Well, you know, I think the American people have this correct notion, right, that the Chinese, the PLN is growing rapidly and that we aren't. And then there's this idea that we need additional ships. But we need those ships to be affordable, and we need them to be on time, and we need them to be of the quality that's required. And so without competition, we are going to get the ships later and later, and they're going to cost more and more. And for every ship that we don't build, that's one ship the PLN doesn't have to worry about, right? So the idea that we need more

ships is not that we need to pour billions and billions and billions more on getting a couple more ships. We need to go to the root of the problem and create an ecosystem where the American people don't have to leverage their entire future for a couple ships, but they have the Navy that they deserve, right? And that's at the core of this, right? So we don't have the ecosystem that we need for, you know, for two reasons. One, you know, we basically abandoned commercial ship building in the 1980s. And we went from being a global commercial shipbuilding player and having an extraordinarily large flag fleet to having virtually nothing today. And then we also went through defense consolidation, right? The Last Supper and this idea that we're going to consolidate

the defense contracting world. And then we ended up with a monopoly monopsy basically in every ship class, right? So when you're the only customer and you've got one supplier, you're at the mercy of you know of how they want to how they want to proceed and with no competition there is no incentive for capital investment into the shipyards right so i tell people often that we build the world's most advanced combatants at like 1950 shipyards which immediately leads one to realize that they're really expensive and they're late and they're not the quality you know that they could be um and so as hunters pointed out before you know go and i know there's a few questions coming up this going out and getting those that know how to do both commercial and naval shipbuilding

do it efficiently and do it um um very affordably um is the is the route to go because it's an industry that has a really really high barrier barrier to to entry and the you know the fact of the matter is that um we do have a lot of capacity to bring this ecosystem back right you'll hear things about there's no workers, you know, and, you know, there's nobody interested in working in the shipbuilding and ship repair industry. And, you know, later on, I'll get into some specific examples of how you have to go where the workers are and you have to basically train highly skilled workers to do things in a maritime context.

And you have to focus, you know, industry technology leaders throughout all kinds of different industries in this country, that they have a maritime role to play, that there's maritime applications for what they're doing, and that's going to be required to bring us back up to the global standard. I appreciate that, Steve. Hunter, I know you kind of led initially, but anything else to build on the ecosystem issue? Absolutely. I mean, you think about, you know, and we touch on this in the article in terms of, like, what are those key elements of kind of that sea power And you think about between the industrial base, the industrial shipbuilding workforce, frankly, the mariners and sailors, those different populations, and then the critical materials, the suppliers, like secondary suppliers, all of those different kinds of players. When you think about what the healthy sea power ecosystem looks like, you have essentially, these are all working in that kind of competitive market.

They are working and working ultimately towards the, you know, the profits associated with, you know, international trade, where, you know, the national merchant fleet is going out and making money. They then pay taxes. The taxes then pay for the Navy. And then the Navy can go and leverage all of those resources that were created for the for the merchant fleet and then can use you put those to work on behalf of the national defense. And then the Navy goes out and both protects the merchant fleet and then opens new markets for the merchant fleet. We might say that opening new markets is more in the Mahanian kind of tradition of the past. But certainly these certain movements towards bringing that kind of approach back. But there is a symbiotic relationship between the commercial and the naval and particularly on that shipbuilding side. And so essentially, the national choice that we made, and again, I really like to emphasize, this was a choice. This was not some big market forces, that kind of thing. We very clearly said, okay, we are going to stop supporting as a government, the commercial shipbuilding industry in the United States and the commercial shipping industry. And the immediate result within a matter of just a couple of years is both of those industries

essentially, they closed in the United States and or moved abroad. And so now, and meanwhile, you see around the world, there are a number of different countries that have made different choices. And China is a brilliant example of this, by the way. This is China, got to give them credit where it's due. They have made a multi-decade national choice. to invest in the foundations of their sea power. They were giving land to anybody

who wanted to start a shipyard back in the early aughts. They were providing significant government capital investment, things like that. And it really was, and to use actually the Chinese phrase, about let a thousand flowers bloom. They went long on this while we were in retreat. And of course, it certainly is a shame geopolitically that here we are, doctrinally an island power, rightfully a maritime power with some of the

greatest maritime geography in the world. I mean, you look at the East Coast, we have one of the world's finest natural harbors every 100 miles along our coastline from the Chesapeake up to Portland, Maine. We have one of the most extensive navigable river systems in the world. We have a maritime birthright and you think about you in the early 19th century this is we used to be really good at this and uh you look at you know the story of the six frigates it is you know and in the u.s navy is born in ultimately initially commercial shipyards and you know let's uh joshua humphreys and company they are built like the the navy is a relatively small portion of the work for a long time so that is so and that makes things a lot more cost effective for you know if you'll allow

us to use the term we the navy as even though we are you know two navy civilian civilians and steve a retired navy captain in uh i like to say temporary exile but um it's a lot more cost effective for us to be able to leverage those commercial resources rather than have to pay you know carry the whole thing on the navy's back all by ourselves and that's where we are today where essentially the navy is the only customer and uh and then you have essentially this series of because of again another national choice of saying hey defense industry we're about to cut the cut the defense budget in a big way from from the post-cold war high or from the cold war high um heading into the post-cold war era that all of a sudden you have this significant winnowing

of that number of competitors in the market. And so as Steve has very memorably put it on a number of occasions as we were kind of sketching this out in his office, that really we're in a situation where the more we pay, the less we get, and the later we get it. And when you think about,

it doesn't take, I think we all learned in high school economics that the worst possible world is a monopoly-monopoly relationship. So when you look at the results, where all the programs or all the Navy shipbuilding programs are relate, they're over budget, and they are under delivering, you know, over and over. And then you look at the structure of the market and the choices that we have made, we know, now the Navy is carrying everything on its back

in terms of these these different enterprises. And, and there isn't any competition to incentivize the the shipbuilding players to do otherwise, and make different choices, seek to improve to be able to win contracts and things like that why are we surprised that this is the outcome this is you know really quite predictable and so now is but the the fortunate circumstance of this is that it is not a larger force that you know some you know world historical you know force of history and economics things like that we did it to ourselves and that does mean we get to undo it to ourselves and that is what we are essentially focused on here by bringing back that competition and especially bringing back competition from world-class players who really know how to make

a living, are hyper-efficient, and are decades ahead of us technologically in terms of their production process? I would like to say that I don't want to add to the alarm, but they all should be much more concerned about the growth of China's full-spectrum maritime power beyond just the rapid expansion of their navy. Because for two reasons. One, that rapid expansion of their full-spectrum maritime power is what enables the Navy that they've rapidly developed and what holds us back on our end from being able to counter, but it also has given them tremendous power and many, many levers well beyond just sort of force-on-force calculation. I don't think a lot of Americans realize what a shipbuilding juggernaut China is. You know, over 50% of the world's market

and even more um and one of their shipyards is like bigger than all of ours combined right um and so i don't think most americans realize that we built like one or two ocean going ships international trade a year and china builds like 1800 a year right but i also don't think that they realize that 99.8 percent of our imports and exports are carried on non-sovereign u.s shipping and so when we met with ambassador tai to try to bring her on board with you know our effort across the administration on this maritime statecraft. And we said, you know, hey, our entire economy, as far as imports and exports go, is like out of our control. And China, which has had a massive rise in its full-spectrum maritime power, while we have been going the opposite

direction, we've essentially traded places in the last four years, has hundreds of levers that they could pull or knobs they could dial that would cause us pain economically from an economic security standpoint, right? So you remember the big backlog at Long Beach during COVID? That's nothing compared to what they could do on all sorts of ways from bunkering to repair to schedules to being sort of the force behind the financing of the entire thing that they could do to really hurt America from an economic security standpoint, right? So this is a much bigger problem than how many ships does the Navy have. And the other thing about it is that people always think of ships in the navy as like combatants and they say that you know there's many that say okay

the navy the navy needs to build these ships and anything that any other shipbuilding is a distraction to that all the other ships are national security also because we need the reserve fleet we need the military city lift that we're going to get through the maritime security program or the tanker security program right we need a lot of what people think of as non-naval combatants to support any sort of sustained combat in the western pacific for more than a couple weeks, right? And so there's this sort of fallacy that, you know, there's commercial shipbuilding and there's naval shipbuilding. And some will say that the commercial side is like a fool's errand and like, you know, a big distraction and will take away from the naval shipbuilding. Really,

it's all maritime security. It's all required to support the Navy, right? So, and the great news about it is that, you know, the other ships don't all come out of the Navy's budget, right? So there's other ways that you can build that maritime power the navy needs through all through a broader set of stakeholders so i would just you know i would just add that um to folks out there that think that you know it's all just about destroyers or even those people that think it's all just about submarines you know we're pouring we have 15 billion dollars and the australians are adding a couple billion more for for the submarine industrial base um there's a lot of things we need to do as a nation maritime statecraft really points out there's a lot of

things we need to do, you know, out there for freedom of the seas, freedom of navigation, our maritime future, that isn't about the Taiwan Straits, right? And so I'll stop there. If you don't mind, I'd like to jump, I want to jump on a couple of points that Steve raised here. The first is in terms of the cost effectiveness of having an existing maritime time sector. I mean, people talk about, they say, oh my gosh, in terms of the level of support that would be required in terms of for U.S. ships to be competitive, either in terms of an operation or in construction. And they say, you know, this would be enormously expensive. And why don't we just give that money more money than Navy? And hey, I don't oppose more money than Navy. But

in this particular context, you know, first of all, what's nice about commercial shipbuilding and commercial shipping is that's non-Navy dollars, which is very, very helpful. It makes it more than just the Navy. It becomes a whole government, whole nation kind of conversation. And in this way, I mean, we talk in the article about in terms of how the existing model kind of sort of talk about half measures of the maritime security program is the current kind of partial replacement for not even replacement but supplement to basically kind of hang on with some this small group of like 60 ships in international trade that um that are militarily

useful for sea lift requirements and we give them a partial offset of uh of their the difference in operating costs between u.s versus foreign flags and so and a big part of the and in a way you look at that particular program that's a 300 million dollar a year program that supports 60 ships which on the one hand okay it's not enough like if you really wanted to go long on you know commercial shipbuilding commercial shipping uh certainly on the operational side i mean i think it's between 50 and 75 percent of that difference between foreign flag and and and u.s flag operation. But the idea that you are getting 60 ships for $300 billion a year, it's very cost effective. Think of what it would cost the Navy to have to buy and operate those same kinds of ships

for the Ready Reserve Force. I mean, we talk a lot about, and the RF, hey, really, really important from a seal of standpoint. At the same time, the only reason the RF exists is because we don't have a vibrant merchant marine anymore. Basically, all those ships were after we more or less put the US flag shipping industry out of business we then got to pick them up on the cheap and go stick them at the dock in baltimore and at various other you know key ports points of deprecation around the country and move from there into this kind of rather than have the model that the british were able to use in terms of ships taken up from trade um the other point i just that steve raised that i want to jump on here is in is you know something that he he put steve played an enormous role in

in the kind of inception of, and I was glad to support him in this, was the Section 301 investigation by the U.S. trade representative into China's drive to dominate really the global maritime transportation system. And I think some of the points that Steve was talking about, and Steve speaks about this really well in terms of all of the things that China could do, their various different levers to impose cost on the United States and our allies around the world. It really stems from, first of all, we are seeing the example, this is what we are seeing between the United States and China right now. We are seeing what it looks like to have a healthy seapower ecosystem in China versus an unhealthy seapower ecosystem in the United States. And it's

not going the way I think we would particularly like it to in that regard. And in terms of the The different levers that they have in terms of, as Steve has mentioned, in terms of global port ownership, in bunkering, shoreside logistics, these different port cranes that they have installed in a frightening number of ports around the world. Then there's, frankly, the commercial ship building. But the we were so Steve and I spent our Friday after we had successfully, you know, helped, you might say, instigate the Section 301 investigation, which resulted in and, you know, working with close partners in the United Steelworkers and a coalition of unions that actually filed filed this case that the U.S. trade representative found that yes indeed china had undertaken you know very much anti-competitive actions uh to come to dominate the global american transportation system and and commercial ship building that have come very much at the cost of at to the detriment of american workers american industry american companies and that therefore they would impose a you know a new basically a

sanction of port fees on Chinese-built vessels, as well as Chinese-operated and owned vessels that would call it American ports. And so this was set to go into effect tomorrow, on Monday. And Steve and I spent our Thursday and Friday dealing with the aftermath of President Trump's meeting with Chairman Xi in South Korea, where in essentially, the Chinese clearly have taken this threat very seriously. And in that they then they've been vociferously opposed to it, they then imposed a imposed pork fees on American ships, and then basically made this very clever move where they said, as they headed into this meeting, you know, they brought it up to the level of head of state diplomacy. And Xi and Chairman Xi basically said to President Trump,

hey, why don't we have a mutual stand down of these port fees? And we agreed to as part of this new trade investment deal. And I think that's a terrible mistake. And as I said, and so basically, our Friday was spent, they gave everybody 24 hours to comment on the proposed one year suspension of these port fees. And Steve and I were both writing about why this is not a good idea. Because among other things. Right now, there are about 180 U.S. flagged ships that would be affected by China's port fees. 90 of them are U.S.-built. Meanwhile, China owns 10,000 ships. 23% of the global fleet, the world merchant fleet, is built in China. And that's 60,000 ships is the total world fleet.

So 20% of that is Chinese-built. So, ah, yes, we will have a reciprocal, neutral stand-down of these port fees. You won't tax our 180 ships, and we won't tax your 10,000 ships. This is not reciprocal by any means. And so there are a lot of... It is a reflection...

The situation is a reflection of China's national choice to really invest in the foundations of its sea power. And that goes well beyond just shipbuilding or even shipping. It goes into a lot of these different elements that Steve has mentioned in terms of the port bunkering, the port ownership, and so forth. So I just wanted to make a shout out for, hey, maybe keeping the Section 301, the pork fees, is probably a good idea for us. And the fact that the Chinese brought it to the level of head of state diplomacy to get rid of it, that says something about the impact that they perceived that it could have. Brian, that's a really important point. And I would also add that this discussion we're having right now, and we're very grateful for the opportunity, because the word needs to get out to, you know, interested Americans. This is a complicated domestic issue also, right?

It wasn't just the Chinese, of course, you know, saw this as a big problem, right? because ultimately this was in the 301. The 301 was launched by five unions led by the U.S. steelworkers, and the steelworkers launched it because the three big plate manufacturers are at 50% capacity right now. So if you can revive commercial shipbuilding in America, you can have more steelworkers making more steel, and that's why they went ahead and thankfully gathered the four other unions together

that care about maritime issues and launched the complaint, the petition, which led to what Hunter was describing. But it wasn't just the Chinese that were opposed to it. Of course, this is very complicated for our culture, exporters, consumers, right? The usual suspects in the shipping world, of course, were relieved that these have been suspended. But we have to get to a point in this country where we really know what we're deciding about, right where we know that okay if we do things in this short that are advantageous to global shippers and their freight rates we're going to pay a price national security wise and economic security wise down the road right i think at the core of this right there are powerful domestic

political reasons that we have the system that we have today and there are powerful forces that want that status quo to be maintained. But the story that hasn't gotten out is the story about the price we're paying for that as a maritime nation, as a global leader who really is mortgaging its national security and its economic security down the road for parochial profitability in very niche markets. Yeah. And I would just add in terms of, to Steve's point about, it is an interesting dynamic that you have you know in in my kind of response to this this proposed suspension in the public comment in the docket of the ust of the ustr um you know what this is is kind of they're they're advantaging yes the the immediate kind of the parochial stakeholders of

what i might call you know america's rump maritime industry like it's a rump state basically you know what's left and yes in the short term it will it will make a lot of players you know they're all like oh my god thank you for not taxing us right now this is great and yet in in the long haul strategically this is a massive strategic mistake that you know rather than saying okay let's have a mutual stand down with china clearly i mean we we've got like we've got them by the balls here this is the opportunity to double down and this is a uh and really the way to double down here is not to not to retreat but to essentially now is the time for diplomacy with american allies don't go to and start conducting diplomacy with

China on this. You need to go, the center of gravity in China's commercial maritime strategy is in many respects, actually not the United States as much as it is Europe. Europe is the end destination for a lot of Chinese products. And you look at the direction of their investment in their import infrastructure, maritime infrastructure, et cetera. And a lot of it is in Europe because that is the end point of a lot of Chinese finished goods. And we know that China has this kind of mercantilist strategy. But who else besides the United States has been deeply, deeply hurt in terms of their maritime industries by China's moves? It's the Europeans. I mean, you look at, you know, Maersk used to build ships in Denmark, and that yard closed.

I think they're thinking about maybe reopening it, but that, of course, you know, they're going to be up against stiff competition. Frankly, a lot of the European shipping lines, you know, They are kind of one of the work. I won't say worst, but worse offenders in terms of they are directly subsidizing Chinese sea power by buying ships from Chinese shipyards. And so the and, you know, this was and we talked about in the article how, you know, a point that we we raised with them with Maersk and with CMACGM was, hey, guys, you know, you guys are starting to all of a sudden feel the heat in terms of Chinese shipping lines that are all of a sudden now their fastest growing competitors in the global shipping market. and we're like but you know you keep ordering ships from chinese shipyards and the chinese shipyards they're like oh we're going to give you a discount over the koreans and the japanese but we and we ask them just hasn't maybe not occurred to you that they're giving you a discount relative to the koreans and japanese what kind of discount do you think they might

be giving to a chinese ship shipping company that you are directly subsidizing the growth of your new biggest competitor. And they're like, we never thought of that. So the time now with the port fee is for diplomacy with US allies, particularly in Europe, to get them to join a multilateral port fee regime on Chinese-built ships. Because essentially a lot of the big shipping companies right now, they're like, okay, the Americans are thinking about putting port fees on Chinese-built ships. Well, that means I'm just going to take my Chinese-built ships and I'm going to put them on the china europe trade or anywhere that isn't going to the united states they can do that because you know china has two major markets one is europe one's the united states okay one's

shutting it off to or putting a cost on chinese built ships here um but i'll just put to the other one if they both impose the cost then both american and european shipbuilding industries and shipping industries will ultimately benefit long term and so now is the time for this you know hard-nosed constructive diplomacy with with our allies to rally the maritime democracies together and to to reclaim the maritime heritage maritime industry that china has taken from us and let's have it this is an opportunity where it won't just benefit the united states it'll benefit all of us and so that is really the move that um the administration or not just this administration, but a future administration, should make. It is very much regrettable that

this administration is not taking that step. Hey, Brian, I'll just say something real quick that's going to be a segue for what I suspect is going to be your next question. One of the tragedies of the 301 suspension is that money was supposed to go towards funding the Maritime Security Trust Fund. That's part of the SHIPS Act. But the other two kind of tragedies of it where, one, it also affects the 100% tariff on Chinese-built ship shore cranes. You know, as you might recall, there was a big security concern about ship shore cranes and all the ability that they can track, you know, U.S. logistics, et cetera, et cetera. And, you know, back when we were sort of in the early years of maritime statecraft

and they were facing a lot of skepticism about what might be possible in this whole government approach, uh the news hit that um that we were going to be subsidizing you know and the first ship to shore cranes built in america in 35 years right um and bringing in japanese uh japanese company that that is a competitor to the chinese firms that build these uh into having a u.s subsidiary in the u.s and doing that for the first time and and with the amount of money i was about 20 billion that was put to that we could we were like this is the perfect this is what exactly we're talking about for like commercial shipbuilding, right? Like what the White House did on short cranes, they just replicate that for commercial shipbuilding. And that's exactly what we're

talking about. So that's also a casualty of the 301 suspension. But the one that I think segues into what you're going to ask us next is, although the 301 port fees were ultimately designed to drive shipbuilding back to America in the interim, because we don't have that capacity, That was going to go to Korea and Japan. So what's good for our allies is bad for the PRC and these duties impacting those that buy ships and realizing they should be not putting all the order books now in China. They should go back to the Korean and Japanese former suppliers is also now delayed, hopefully delayed and not put off for the for the foreseeable future. gentlemen, you just offered a masterclass of the problem and the challenges and things we need to get after. That was absolutely phenomenal. Tying it back to how we started off, that casual reader, the layman might look at the bar graphs of the comparative PRC combatants versus US

combatants and think, well, that's the problem. It's almost as though you think like, oh, I just have a fever. So maybe I just need to take some cold medicine because I caught a bug and a few days will go away when in fact the nature of that fever might be because you're in sepsis and you have these infections that are going to kill you and you need to be in the hospital yesterday if you want to survive. That's kind of the takeaway. In addition to, Hunter, I liked your comment about how we have a maritime birthright, but it sounds like we've been given it away. So we got to find a way to take it back. It's ours to lose. So I really appreciate all that insight. That was phenomenal. So gentlemen, yeah, we need to talk about some of our allies. And I'm going to kind

of tie a couple of ideas together. The U.S. clearly, as you've articulated, is not the only shipbuilding game in town. We've got allies that have sea power ecosystems that are much healthier and a better balance than ours. In your article, you call out South Korea and Japan specifically. And so as a result of that, again, same thing, a casual reader might think like, well, hey, they have better ecosystems than we do. Why don't we just have our allies build their ships? So can you talk about uh both the maritime ecosystems the sea power ecosystems of those allies or any allies frankly if you'd like to uh and you know what we should do with them you know the risks of say just asking them to build our ship so over to you uh hunter if you'd like to start sure so um

so on the one hand korea and japan so just to start in terms of what kind of the state of play for their shipbuilding their their sea power ecosystems are um they are in a much healthier place than we are they are in the place where frankly speaking for myself where i would like us to be and i think steve would agree with that of they have some of the world's foremost ship building players uh and shipbuilding companies they have uh and and they can build very much respected combatants including asia's destroyers uh for a fraction of the cost that we do and And again, that is under basically because they are able to underwrite their naval production and kind of essentially subsidize the Navy by the fact that that's not how they make

most of their money. They make their money on the commercial side, which and they are, I mean, you look at just in terms of the size of the physical plant that they have devoted to naval workers, commercial work, commercial work is many times larger than the naval yard. And the naval yard, by the way, is probably about the size of a lot of our naval yards if we're being perfectly frank and so what that allows you to do in terms of you think about the network and the constellation of secondary suppliers and the ability to buy in bulk and for you know piping and cabling and all of those different raw you know key raw and kind of

secondary materials um that are necessary for effective shipbuilding they are able to command with the that larger buying power in terms of economies of scale not to mention they are in this absolutely cutthroat really deathmatch competition with both with each other and with china and particularly with china and right now you know we're actually seeing japan is sort of losing market share in a significant way and so um they are really working very hard to keep up that means they've got to be on their game as efficient as possible finding every new technological advantage it is you think about you know capitalism is ultimately this darwinian competition for survival and that's what they have it's what we do not have and so we should try to bring that

over here and figure out what are the policies that we as the united states government can on can implement in order to make that a a good business decision for them and have this kind of cutthroat competition be a uh and the technological investment in in terms of from technology to worker quality of life, have that be the correct business decision for the players involved and have that be the outcome of our policy. So in terms of, and I want to get to, and I know Steve will be able to expand further on this, there are a lot of really good reasons why we, even though some people might say, okay, you just said how wonderful things are over in Korea and Japan and in certain sectors might

include Finland in terms of icebreakers. Why don't we just outsource over there? And there's a lot of really good reasons why we shouldn't, why we don't and should not. And so the first one is, I mean, there's a lot of issues in terms of, let's start with the technical security. You know, you want to make sure that your systems, your designs, all of those different aspects, that they are secure against foreign compromise um that is a and you know other people can speak as to the details of that but that's a very significant consideration um then there's the the strategic element which is one of the things that i tend to want but like to focus on which is you you you look at the geography of um all of the shipyards that we're talking about across the different

segments of the market um we're talking if you're talking about korea and japan you're talking about finland um all of these these these shipyards they are under the guns and or in this case under the missiles and they're when we're not even talking about the medium range missiles that can get you it's the short range missiles that you have to worry about the class of weapon that china and russia have more of than any other kind of weapon in their arsenal that is a problem and you know my mentor at the naval war college is jim holmes uh who and he likes to talk about how in that military competition is different from commercial competition in that ford is not trying to actively blow up toyota's factory and in the case of the

global shipbuilding market where you have the top three players 90 of the market is china korea japan that is literally not true you have one of those players not only would really really like to be able to blow up the uh the shipyards of their competitors they have the means to do so They have invested heavily in this arsenal of missiles, particularly in that short range envelope that range all of the yards in question. And the same goes for the Russians in the Gulf of Finland as well. So, if you want to have, so this becomes a point about wartime, the ability to reconstitute in wartime, which is really, you know, absolutely critical when you think about, you know, when you start looking at kind of the contours of, you know, God forbid that we eventually go kinetic with China and or Russia. You look at the contours of what that would look like, and it becomes really, really important to have the ability to build ships here in the United States. It's not that we would be completely immune from attack in the continental United States, but there is a very real cost when you look at just in terms of the cost associated with making a big intercontinental missile versus a short-range missile. it's real and that basically means it would draw like the cost and complexity of the missile to

go really far and be able to hit something gets much much more expensive that means they can make fewer of them they can afford fewer of them and that's going to make that salvo size a lot smaller and potentially easier to defend against now of course you you run into the question of okay does it become a nuclear does it become a nuclear question and if it becomes a nuclear question Well, that's why we have nuclear weapons. And if you attack the U.S. homeland with nuclear weapons, I think we're going to have something to say about that. So this leads to these very difficult now economic problem of how do you get these world class shipbuilders who have put a lot of capital investment with with the help of their governments into their home shipyards? They know how to build ships. They're really good at it. And as Steve mentioned, there are very high barriers to entry in this industry. How do you get them to then come and invest in America? And that's been basically the business problem that we've been trying to solve. And that's why we basically went in terms of our competitive set that we were focused on. We were focusing on basically four companies that know how to build, you know, really, really warships that our Navy greatly respects and know how to make money building commercial ships. So it's a – and then the other point that I would just touch on before I'll give it, you know, turn the camera back over to Steve is the business case.

This business case associated with, you know, this very hard thing we are asking companies to do. how do you transfer your technology bring people bring you know best practices all of these different things and you know by the way best practices bring best best practices over you know across international border that's very hard um it's harder than like what we are asking these companies to do is very it is expensive and difficult and the reason why they would do that the big incentive they have is that we would essentially say once you come to the united States. And this is the message that we had to the Koreans and the Japanese when we went to go meet with them very consistently, that once you come in and set up a U.S. subsidiary, that you're

a U.S. company, you can play in the market. And the U.S. Navy and U.S. government shipbuilding market is extraordinarily lucrative, and they want in. And we have been very consistent that the only way they're getting in is if they come here and become a U.S. company with a U.S. shipyard with U.S. workers and all of that. So it's really it really hurts that business incentive of please come do this extremely difficult thing that we're asking you to do so that you can have access to the U.S. government market. It doesn't make a whole lot of sense then for the U.S. government to say, oh, and in the meantime, why don't we just outsource our business to you right now? so why would so if you're the company why would you go to all the time the time and trouble and

expense of investing in america setting up a world-class shipyard here in the united states in order to get u.s government business tomorrow if u.s government's going to give you their business right now so that is so in order to execute this very challenging economic and business maneuver to get these companies to invest. You can't agree to outsource that U.S. government production. There is trade space on the commercial side because essentially all the U.S., most of the U.S. merchant marine and all of it that's in international trade is already foreign built. So that is where you say, OK, I think the Ships for America Act is a really good way of kind of squaring this dilemma where they say, OK, as we are going to ramp up this new

strategic commercial fleet program of 250 ships that are going to be ultimately going to be US built, US flagged, US crewed. The first seven years of that program, we are going to allow companies to flag in foreign built ships if they're from our allies. But then there is an expiration date of like seven years on that initial flagging kind of process. So commercial side there's trade space government side the whole reason they're doing it they're willing to entertain this is because of our government market and so we need to make sure that we are as we are maneuvering even if it requires accepting short-term short-term risk in terms of our own inventory um there is um it is much more important to be able to build the ships that

we need when we need them because ultimately the ability to reconstitute that affects your ability and how you employ the force that you have today. Steve, anything further on that? Great point. Yeah, so I don't know if you've been to a shipyard in Korea or Japan. Most folks haven't. They're quite extraordinary.

I mentioned earlier that we build the world's most advanced naval combatants in 1950 shipyards. You know, Korea and Japan build cutting edge 21st century naval combatants at cutting-edge 21st century shipyards that are, as Hunter pointed out, mostly commercial. But, you know, the level of automation, organization, digitization, support to the workers is something that we really need to take a hard look at

and bring over here as best practices. You know, they took us into their digital production center and they had every single ship that they had under contract or the contract was signed yesterday or the ship was finishing sea trials and you click on a ship and then the screens all fill with everything about that ship basically to the half day that it's going to be delivered right um and we get a powerpoint brief that says you know like every quarter it says there's a there's a bullet that says you know the ship will be ready anywhere between 12 and 36 months from now right like you know the it's just kind of ridiculous at a certain

point and then they fly you know they fly a drone over the yard before every shift and they upload all the all the imagery and you know click on a piece of equipment some stock a component and then the screens fill that everything about that um extraordinary levels of efficiency digitization which is why they are able to produce you know an early burke um you know the kdx at about a you know about a third of of what it costs on our end it's not the labor rates if you look at the if you really look at the labor rates for Germany and Japan and Korea and the U.S., there's not a big difference, you know, in what the workers are making. Most of the savings are just basically leveraged in the commercial aspect of it. These massive commercial yards that do be able to come

out into the corner. And then also, you know, all the efficiencies and all the automation and all the digitization and all the things that they have to do in their struggle every day to keep losing market share to China. And the Chinese yards are very cutting edge also, right? So we're not talking about anything that's like antiquated on the on the prc side either and so so we wanted them um to bring all of that to america for three reasons one to introduce some competition right to have more than one option you know two to bring all these best practices that we've talked about um you know and three to build the dual dual commercial and naval model that we really need to have to, you know, to, to, to be competitive. Um, and so Hunter's points about

like, why not just outsource if it's so awesome there, why not just buy them there for a third of the price? Um, and you know, he hit on all, all the really important points. And one of the, you know, one of the examples that he always likes to use, um, is the, uh, the Midway example, right. Where Admiral Nimitz didn't really risk his last carriers at Midway because he had a whole bunch about to be launched and thousands of ships warships on the drawing boards right like we made decisions in world war ii knowing we had the industrial capacity domestically that we can count on and japan made very risky and very bold decisions because they knew that they went to war with the navy that they had right they didn't have the industrial capacity to really reconstitute

like we could and so you know the question is who is japan today and who is the united states today And if you're buying your ships, as Hunter pointed out, you know, from Northeast Asia, well, you're not going to be getting them in crisis or conflict, right? And you're not going to be able to reconstitute when you need to. But even the shipbuilders in Northeast Asia and their customers in Europe realize that it's in their long-term interest to have some geographic diversity, right? it's in their interest to be able to build ships let's say in the united states if you're building them outside of the threat envelope that hunter so articulate or you know explain and if you're a ceo of a major you know shipper like maersk it'd be great to not have all your eggs in either the china basket or the you shifted from china to the northeast asia basket

in crisis conflict where you're not going to be getting your ships repaired or built at that Right. So there is the sanctuary of the U.S. that that that affords, you know, real benefit unless folks want to escalate way up the escalation ladder, which is likely not going to be the case. The other the other point that, you know, like we coaxed and cajoled and rolled out every incentive we could to get them to come here to open U.S. subsidiaries, right, to come to America. you kind of put all that back to square one when you just say okay we're just gonna we're just gonna buy them buy them from you right so from from from from abroad so all of that effort you know undercuts you know what's what's already um already been uh been put in place and you know i mean i'll give you some examples right so the advanced technology technology vehicle manufacturing loan program that was part of doe and the title 17 clean energy financing part of doe that was

all part of the ira it had 45 billion dollars for advanced vehicles and it had 120 billion for buying fleets that were you know fuel efficient or title 17 and so like the koreans are already building for their european customers are already building dual fuel ships that already meet all the requirements for those guaranteed treasury rate loans for 30 years so we went to the head of lpo and do it and said how come we can't make this available to the maritime industry because one of the three things that the the asian shipbuilders say is keeping them coming america is the huge capital investment required right capital investment supply chains and then workforce right so after about a year of meetings doe made all of that money available to the maritime industry

So anybody that wants to go for Greenfield, Brownfield, or is modernizing an underperforming shipyard right now had access to these ATVM loans at treasury rates for 30 years, right? And there was more than enough money because it was $45 billion. And then the buyers of the ships, and we told this to the CEO of Maersk, you could buy fleets of ships built by your Korean builders in the U.S. and at treasury rate loans for 30 years because it's part of Title 17 for purchasing fleets of vehicles. All of that was just an example of the ways and the lengths that we went to to incentivize getting them to come to America and take advantage of programs that were in place. You know, and these programs were, you know, mainly mainly being used by GM and Ford for electric vehicles. Right. But there seems to be this impediment to like to wanting to put money behind shipbuilding. We're putting huge amounts of money behind everything else, which, you know, I don't

know if the number of EVs in America is really going to secure economic and national security future in a major conflict in East Asia, but it sure as hell would to have world-class shipbuilders with U.S. shipyards and putting the kind of capital investment in them that they need to make them as awesome as they are, you know, awesome in their production capabilities as they are, you know, overseas. um so you know i think that um and the last thing i'll say is you know there's never been a great naval power that abandons its abandoned its sovereign ability to build its own vessels there's i mean look if you look at the history there's never been a naval great naval power

that couldn't build its own naval combatants right they might have got their lumber from sweden but still built them in the in england right like there's never that's never been the case so because it takes years to design ships and years to build them and if they're good they're in service for 40 50 60 years right we've seen this movie play out before we ended the we ended the policies that supported commercial shipbuilding america in the 1980s and it didn't take very long for there to be zero industry left in america in that regard how long do you think it would take if we start outsourcing our naval shipbuilding to places that can build them for the third of the price before our primes get out of the business and before our very depleted workforce becomes

like extinguished. And if you're talking about something that takes decades to put together and you use for half a century, we don't know what the geopolitics of the world is going to be 80 years from now. I think it's in our interest to make sure we maintain a residual capacity to build naval combatants in America so that 80 or 90 or 120 years from now, we can still do it because this isn't the kind of industry that you just, you bring back rapidly. And so on the last point I'll make on why we, of the many reasons we wanted to bring over the world's class shipbuilders is it's a very hard industry to get into if you're not huge.

And if you think about all of the money that we put into incubating, the DoD puts into incubating defense firms, right? What happens to most of those defense firms like 10, 15 years down the road? They're all acquired by the monopoly. They all become part of the monopoly-monopsy paradigm that we're stuck in and can't break out of, right? The big Japanese and the big Korean shipbuilders are global behemoths that are much bigger than our primes. They are not the kind of people that are going to come here and their strategy, their entire strategy is to get acquired by one of the primes in five years. so they can cash out.

No, they are like, you know what I mean? They are bigger than our primes. Our primes might get acquired by them, but that's another story. That is an excellent synopsis of all the interrelated problems, the economic issues, the international issues, the sovereign ability to conduct manufacturing

and why that's important to security. So much is interconnected, and I really appreciate the depth and the breadth both of you provided to help the listener understand the scope of the problem and how to get after it. And that leads us to segue into a couple additional questions. I'm going to tie them together just being sensitive to time. But basically, gentlemen, in your article, you discuss your proposed solution to this, which is the maritime statecraft strategy, or rather a strategy to solve the problem you articulated so well. So you've got this strategy. The prior

Secretary of the Navy initiated actions in accordance with that strategy. We have a new secretary who may be able to move in accordance with that or is moving in an odd direction. Can you explain that to us? What is the strategy? What has been done? And where are we going? Hunter, please, let's start with you. So really, this is in many ways the money question here. So essentially, the way that we moved out, so just starting with the first part about, okay what do we need to implement it um so you know theory of the case no comp don't have competition uh need competition and need to bring back the dual use business model and so basically let's go to the world-class players who know how to do this with that dual use business model and

get them to come invest in america and then you have competition so what we so essentially the way we went about implementing this is um so um steve and secretary del toro um i was the reach back support remaining in the states so steve and the secretary go to um korea japan uh in february 2024 and to go and make direct contact um with with with these major companies um and it and it goes very very well and this is and this is this comes after by the way you know over a year of kind of messaging the strategy of kind of once we kind of like you know steve and i kind of started collaborating august of 2022 um that you know start putting these ideas in front of the secretary over the over the that fall eventually that kind of gets coalesced into uh secretary

speech at columbia university which then you continue to basically adopted a cumulative strategy of how we were messaging this over the over the you know the following months at a series of naval major naval conferences like surface navy associations airspace things like that eventually culminating in the speech to the harvard kennedy school and that was in late september of 23 and then um so now february 24 going to the end of pacific and essentially prioritize let's go and and talk make direct contact with the senior most leadership of these different companies so uh hanwha and hd hyundai in korea mitsubishi in japan marina i did in japan and this goes very well

and so message is very clear of invest in America and within a matter of months one of those competitive set of four that we're focused on

one of the four Hanwha pulls the trigger and announces that they have reached a deal to purchase the Philly shipyard which they closed in December 2024 and And they were coming in, they said, okay, we are going to, they bought it for a song at $100 million, and they were planning to invest $500 million into the yard. And since then, they have, you know, since then, upped the ante to $5 billion into the yard.

Next phase of the strategy is, you know, so that's kind of on the supply side. And by the way, doors are still very much open in terms of for more of these players to come invest here. And, you know, certainly we've also had a number of engagements with Davies Shipbuilding, a Canadian firm which bought after. So so Finland has some, you know, some of the world's best icebreaker shipyards in the world. They were owned by Russia for a really for a really long time. And then they invade Ukraine. And and then, you know, rightly, Finland forced forced those Russian firms to sell their stake. And Davies Shipbuilding, this Canadian player, bought them. and so they and they and they came in they said hey we want to come in and help with you obviously

navy's involved in with coast guard production as well and they're like we want to play tip and so they came in and they were a lot of meetings with uh uh with uh with the secretary on on on on that side and that they more recently announced their intention to purchase gulf copper in yeltsin texas which is great so you know becoming truly in you know a global phenomenon in terms of you know this maritime sacred strategy is really you know on uh across both oceans for us and from there uh it became a matter of okay now we need to work the demand side and as steve was talking earlier about in terms of you know some of these conversations with the european um shipping firms. You guys are like, hey, here's an opportunity for you. A, you need to diversify

your risk about where your commercial order books are going to be placed. You really don't want to put all your eggs in one basket in Northeast Asia as there's the prospect for crisis over there. And here's an opportunity. You have all those Korean and Japanese firms that you know and love. They're coming to America. And why don't you start doing business with them as they get set up here and so uh met with um so so steven the secretary went to go meet with the head of mersk again i was stateside and help helping kind of with all the prep for for those engagements and you know that and that was fine and but we we knew that meeting the ceo of mersk that and we we did we did somewhat plan it this way that we knew in talking to them we were really

messaging MRSA competitors. And it was, I don't know, I think it was, Steve, was it more than, I think it was like 20, between 24 and 48 hours that the CEO of CMA CGM sends a letter to the secretary. Their people are on the phone with us and saying, we are very interested in investing in America. And so that starts a number of months of very fruitful discussions and very fond memories talking with with the team over there and um and then in march uh was really gratifying all of a sudden i remember getting a call from them and they're like hey um can you put us in touch with the with the hanwha guys we're now at fellowship here i'm like yeah here's your email and the next day they're like and we cmacgm is investing 20 billion dollars in in the united states they're

uh you know gonna i think it was double the size of their u.s flag fleet they're going to create 10,000 new jobs, it was like, fantastic. So that's going to be really important in terms of making sure that they follow through and the US government does everything that they need to do to make sure that that continues to be a correct business decision for that is going to be really important. I think Steve will be able to speak to two initiatives that he spoke a bit about in terms of the engagement with the Department of Energy that he was absolutely instrumental on in terms of helping on the financing side and in terms of these treasury rate loans and getting these applied from not just the car industry to the, but getting them applied to the maritime industry.

Then also in terms of working with unions, in terms of the, you know, creating a rotational workforce that can be deployed kind of in an expeditionary way to shipyards around the country to support Navy programs. So there, and Steve was absolutely instrumental on that. So a number of different lines of effort and engaging, and certainly on the white collar side in terms of Naval architects, we had a number of really productive lines of effort.

I'll just, before I turn back over to Steve to talk about some of the specifics of that, I would say that it has been very gratifying to us how to see how the the the the intellectual staying power of this approach through across the political transition and um steve of course you know he uh being a political appointee left on january 20th um i my term ended at the end of june so um it was you know seeing a bit a bit of the transition into the into the new uh you know kind of the leadership change of the um in the department of the navy it certainly i was prepping a lot of documents for them to uh

kind of think about okay what can they do to double down and expand on the strategy certainly secretary phelan's early moves um certainly seemed to suggest that those were products that hopefully his people had put in front of him one of them was hey we could really use kind of a re-attack on japan in terms of i should be careful how i say that um uh we really need to kind of circle back with the Japanese to see about, hey, how do we bring them in into this conversation and into, you know, from an investment standpoint. So it was gratifying to see Secretary Phelan on his first trip to the Indo-Pacific. He was, you know, certainly did Korea, but he clearly was spent spending a lot of time with Japanese shipbuilding firms. So that is,

I think that that is a very fruitful opportunity. I do think there are rocks and shoals that the administration needs to watch out for. They are hitting some of them right now in terms of this discussion of potential outsourcing. This icebreaker deal, I think, is a mistake for these reasons. If there is one sector where you would think about outsourcing, the icebreaking probably makes the most sense. However, the precedent is a real problem. And thus, we seem to have come through the APEC summit where you didn't have the Koreans come and pull out the Finnish case against us as a way to basically say, well, you should outsource to us too. God willing, that remains the case. Certainly, I mean, and Steve has been instrumental in terms of

in some of those conversations with the tariff negotiations with the Make American Shipbuilding Great Again proposal. Those were, you know, I mean, I think the Koreans were really smart that they they they crafted a proposal that was going to be durable that respected the you know the foundational american strategic need that we have to build warships here in the united states if you want to do business with us you need to come come here it is very wise for them to stick to stay on that point and to remain focused on how do we get korean investment into the united States, as opposed to, you know, trying to say that it needs to come to Korea. I think the commercial side, that interim step in terms of the Ships for America Act,

there is trade space there, not on the government side. And so I, and, you know, as I've written elsewhere, I think in terms of on the ice breaking side, I think that is a, not so, that is an example of, you know, not so much the art of the deal as the art of the giveaway, or risks being the art of the giveaway. And so it's a because there there is a going to even with the most forward leaning partner in a given moment, it's a people change their minds. And so that's where it's really important. The investment needs to come first. The investment and the ability to build ships in the United States, that is what ultimately changes the calculus. That is the deterrent. It comes down to ships win battles, shipyards win wars.

I'll turn it over to Steve to talk about a number of these initiatives where he really was absolutely instrumental on. Yeah, thanks, Hunter. You know, one thing I'd like to say, we focused a lot of this discussion on Allied shipbuilders. But at its core, a very, very fundamental reason for maritime statecraft was to get outside the lifelines of the Navy, get outside the lifelines of the Pentagon, and bring awareness to all the other stakeholders about their role, what they could do, bring them as advocates, and then lead to action across the spectrum. And so it was, you know, we had a campaign to go to every single cabinet member, you know, the head of the CIA, the National Security Advisor, governors, you know, mayors, union presidents, anywhere that we saw someone that had an important role to play, that could be a tremendous help to the effort, that would benefit tremendously from their point of view, from their equities, and others that were being underutilized, right? So, you know, we went to Secretary Buttigieg, we went to Ambassador Tye that we've already talked about, about all the things with USTR across the spectrum to try to get everybody aware, because there just seemed to be that we had fallen asleep as a nation on, you know, on our maritime equities and how important our role is in the maritime world. But not only to get people to wake up about the crisis that we're facing, but to wake up about their their equities in it and how they could benefit benefit from it, which led to many programs. You know, Department of Energy already talked about Department of Labor, you know, U.S. trade representative trying to get the the Intel community to start doing Intel assessments about these kind of things.

Right. All these complex things that we've been talking about that haven't been really fully analyzed and what it really means for economic and national security, you know, went to, you know, I personally think that a really important part of how we make this successful is to build broad political support, bipartisan political support. and in this very person, but not only in Washington, but at the state and local level. So we went to governors of places that should have an important maritime role to play, but aren't. You know, we went to the Midwest. We met with, you know, governors in the Midwest. I mean, Hunter brought up the, you know, the white collar side of things. You know, in Michigan, we went to the place and you're a graduate, a proud graduate, Brian, go blue. But at the last school in america um the last r1 university in america that deals with naval architecture marine engineering and these issues from undergraduate all the way through postdoc and because there

are multiple professors there that are aging out right we're losing our seed corn you know we need to we need to and we did we had the austin naval research and then we had a maritime industrial based grants and contracts into that program, you know, to broaden the curriculum, to get more faculty, more students interested in what they were doing, having a real maritime application. We partnered them up with Seoul University and HG Hyundai, and then many other universities have joined. We reinstituted the NFC professors program to get, you know, to get more universities

with the direct funding line to a professor and students on working on naval engineering questions, right? Because we have a blue-collar problem in this country, but we have a much bigger white-collar problem because we just don't have the architects and the engineers and the managers that can make these big modern shipyards successful. On the blue-collar side, Hunter brought up the unions part of this, right? And so, you know, the president of the Boilermakers built the Bulkley, which the Secretary of the Navy commissioned as a Navy commander when he was the commissioning CEO of the Bulkley. He also fixed the USS Cole. Well, that shipbuilder from Pascagoula eventually became the president of the International Brotherhood of Boilermakers and Ironworkers, right? And we reached out to him because we had heard from our shipbuilders in Wisconsin that they couldn't recruit or attain any labor.

And so he went out to 800 locals in North Dakota, South Dakota, Minnesota, Michigan, Wisconsin, got almost like within a week, a thousand construction welders eager to sign up for a Navy certification program, a week-long, week-and-a-half-long program getting certified as a Navy welder, right? These were guys at bridges, skyscrapers, energy projects. They were willing, because they don't do a lot of that in the summer and the winter or when interest rates are high, they were willing to be this rotational workforce and they were going to roll into shipyards in the upper Midwest and do the welding that's needed. Fell through because they didn't want to pay the union rate, but we salvaged the whole pilot program by getting them work, building the enterprise at Newport News. And I just bring that up as an example of we have skilled workers in America. They just don't think they're maritime workers. We need to go where the workers are and tell them that they have a maritime role to play and there's something in it for their family and them as far as, you know, their economic well-being, right? We have companies and suppliers, you know, in the heartland of America and all over America that would have a tremendous role to play in the maritime industry revival if they thought of themselves as maritime companies or the products having maritime application, right?

Like this is the United States of America, right? We have a huge economy and a lot of great innovation and a lot of great companies doing a lot of things that we could apply to the maritime sector if we just got creative about it and thought about it. So, you know, I would just say that, like, maritime statecraft is more than just going and getting some world-class shipbuilders to come to America. It's about like waking us up, getting rid of our sea blindness and realize, you know, there's a lot of prosperity and a lot of jobs and a lot of economic security for this country if we start putting it towards maritime ends. And what I would want this administration to continue to do is remembering that. And, you know, when they say that they want to make American shipbuilding great again, that they also realize that there's other decisions they're making that undermine that. So, you know, you set up a shipbuilding office in the NSC and then you disband it, right? You say you support, you know, the Koreans coming into places like Philly and then you do an immigration raid in Atlanta, right? You know, there's just these things they need to coordinate left hand, right hand.

You know, you roll out these great port duties and two weeks later you suspend them for a year, right? So if shipbuilding is going to be important, if a maritime revival in America is going to be important, you have to be true to the things you're doing that are causing it to happen and be aware of and try to avoid all the things that undermine it or set it back. um and and and we finally i'd say is we need to incentivize we need to move the incentives that various parochial interests have really really refined and gotten super good at over the years and they're just doing what they're just optimizing what they need to do for their bottom line we need as a country we need to move those incentives so that then they go they chase new incentives that are going to solve a lot of inherent problems that we've never been able to get over because of the domestic political issues um behind it uh listeners two

things to note that you heard here first a great tagline ships win battles shipyards win wars a hunter i think you need to um put some copyright on that real quick before someone else takes it and uh steve thanks to you the official big den big 10 team of naval strategy is the university of michigan go blue uh hey uh we're coming up on time here as we wrap up gentlemen is there anywhere that listeners uh you'd like them to find you online or anything else that you're working on that you'd like to plug no i would just say that you know two of the things that i'm working on that i think are pretty important for people to get behind one of the maritime prosperity zones um so if you live anywhere near where there's potentially a maritime prosperity

zone and you want to have your community benefit from all the tax incentives, tax credits and regulatory rollback that is going to come with that, get a hold of your local county executives, your congressmen and whoever else, labor, businesses, et cetera, to try to get a Maritime Prosperity Zone coming to a town near you, because that's one of the approaches this administration has taken to try to bring this revival. And the second thing that I think is really important and that I'm working on is the the goal the goal here is to make american shipbuilding great again and not make you know somebody else's shipbuilding great again um so we've got like i said you know american steel

american you know folks leading on reactor technology all kinds of things that american business should incorporate into we should supply with americans to build a political support to have this thing um to have this thing being uh sustainable and enduring uh for the future Hunter, anything else? Yep, so continuing to write and publish on Maritime Statecraft I had an article come out not so long ago in Defense 1 of Don't Give Up the Shipyards

and continuing on I'll post where you can find my comment for the USTR Section 301 discussion and certainly keep an eye out

and look forward to continuing to write and publish and make good things happen. Gentlemen, this has been a remarkable conversation. Thank you so much for your time and sharing everything with us. Thanks for joining us. Fair winds and following seas. To listeners,

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