New Report by Open Markets Institute’s Arnav Rao Exposes Alarming Decline in U.S. Maritime Power & How to Build It Back
Feature Article in The Atlantic Warns of Growing National-Security and Economic Risks as U.S. Loses Control of the Seas
On May 28, 2025, the Open Markets Institute released a landmark report by transportation policy analyst Arnav Rao, titled Charting a New Course: Steering U.S. Maritime Policy Towards Security and Prosperity, published in conjunction with a feature article in The Atlantic. The report details the systematic dismantling of America’s maritime capacity over the past century, the severe national security and economic consequences, and lays out a set of policy solutions for addressing the problem.
Rao’s investigation presents a sobering picture: although roughly 80% of U.S. international trade by weight travels by sea—and nearly 90% of military equipment and supplies are transported by ship—the United States currently produces just 0.13% of the world’s large commercial vessels. Meanwhile, China now builds 60% of all new ships and dominates every critical facet of maritime logistics, including shipbuilding, container production, and port crane manufacturing.
“He who commands the sea has command of everything,” Rao writes, quoting the Athenian general Themistocles. “By that standard, the United States has command of very little.”
The report traces the decline of U.S. maritime strength to deliberate deregulatory policies beginning in the 1980s. Key among them was the dismantling of a once-effective regulatory framework that governed ocean shipping as a public utility. This shift allowed foreign-owned cartels to dominate shipping lanes, undermine U.S.-flag carriers, and squeeze small American shippers, farmers, and manufacturers out of fair access to international trade.
Rao details how this vulnerability came to a head during the COVID-19 pandemic, when foreign shipping alliances rejected hundreds of millions of dollars' worth of U.S. agricultural exports in favor of more profitable Chinese-bound cargo—leaving food rotting on American docks and driving windfall profits for overseas carriers.
The report also reveals a critical shortage of U.S.-flag vessels and qualified mariners to support military operations. In 2024, the Navy was forced to lay up 17 support vessels due to lack of available civilian crews. In the event of a major conflict in the Pacific, the U.S. would require more than 100 fuel tankers, yet currently has access to fewer than 15.
Rao warns that modest reforms currently proposed by Congress and the White House, including tariffs on Chinese-owned ships and tax breaks for U.S. shipyards, are insufficient.
“This is not just a matter of investment or tariffs,” said Rao. “What we need is a return to a public-interest model—one where government regulates ocean shipping to serve national and economic needs, just as we did successfully throughout much of the 20th century.”
The report calls for:
A revival of robust public investment in shipbuilding, port infrastructure, and mariner training;
Restoration of fair-market rules under a reinvigorated Federal Maritime Commission;
Re-establishment of a U.S.-flag commercial fleet capable of sustaining both military and economic security;
Renewed antitrust enforcement to break the grip of foreign shipping cartels.
The full article and report are available through The Atlantic and the Open Markets Institute.