By DIDI TANG, Associated Press

WASHINGTON (AP) — In only two decades, China has grown to be the dominant player in shipbuilding, claiming more than half of the world’s commercial shipbuilding market, while the U.S. share has fallen to just 0.1%, posing serious economic and national security challenges for the U.S. and its allies, according to a report released Tuesday by the Center for Strategic and International Studies.

In 2024 alone, one Chinese shipbuilder constructed more commercial vessels by tonnage than the entire U.S. shipbuilding industry has built since the end of World War II. China already has the world’s largest naval fleet, the Washington-based bipartisan think tank said in its 75-page report.

“The erosion of U.S. and allied shipbuilding capabilities poses an urgent threat to military readiness, reduces economic opportunities, and contributes to China’s global power-projection ambitions,” the report said.

Concerns about the poor state of U.S. shipbuilding have been growing in recent years, as the country faces rising challenges from China, which has the world’s second largest economy and has ambitions to reshape the world order. At a congressional hearing in December, senior officials and lawmakers urged action.

Last week, President Donald Trump told Congress that his Republican administration would “resurrect” the American shipbuilding industry, for commercial and military vessels, and he would create “a new office of shipbuilding in the White House.”

“We used to make so many ships,” Trump said. “We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact.”

In February, the heads of four major labor unions called on Trump to boost American shipbuilding and enforce tariffs and other “strong penalties” against China for its increasing dominance in that sector.

“What we are seeing now is a recognition of the strategic significance of shipbuilding and port security, and the related challenges posed by China,” said Matthew Funaiole, a senior fellow in the China Power Project at CSIS and a co-author of the report. Funaiole said concerns over shipbuilding are “a fairly bipartisan issue.”

The report said that China’s shipbuilding sector went through “a striking metamorphosis” in the past two decades, transforming from a “peripheral player” to the dominant player on the global market, with efforts centered on one state-owned enterprise: China State Shipbuilding Corporation, or CSSC.

At the same time, China has greatly expanded its navy. Last year, a CSIS assessment found that China was operating 234 warships, compared with the U.S. Navy’s 219, although the U.S. continued to hold an advantage in guided missile cruisers and destroyers.

In developing recommendations for the U.S. to compete with China, the researchers zoomed in on the Chinese company’s use of Beijing’s “military-civil fusion” strategy, which blurs the lines between the country’s defense and commercial sectors.

They found that CSSC, which builds both commercial and military ships, sells three-quarters of its commercial production to buyers outside China, including to the U.S.-allied Denmark, France, Greece, Japan and South Korea. These foreign firms are thus funneling billions of dollars to Chinese shipyards that also make warships, advancing China’s modernization of its navy and providing Chinese defense contractors with key dual-use technology, the report said.

The CSIS researchers suggested that, as a long-term fix, the U.S. should invest in rebuilding its shipbuilding industry and work with allies to expand shipbuilding capacities outside China. For the near term, they recommended actions to level the playing field and “disrupt China’s murky dual-use ecosystem,” such as by charging docking fees on Chinese-made vessels and cutting U.S. financial and business ties with CSSC and its subsidiaries.

The Trump administration has proposed new fees on China-linked vessels calling on U.S. ports. A BlackRock-led consortium last week agreed to acquire stakes in 43 ports across the globe, including the two ports on either side of the Panama Canal, from a Hong Kong-based conglomerate.

By JILL LAWLESS

LONDON (AP) — British police arrested a man on suspicion of manslaughter as they searched for answers about why a cargo ship hit a tanker transporting jet fuel for the U.S. military off eastern England, setting both vessels ablaze. One sailor was presumed dead.

Humberside Police said the 59-year-old was detained “on suspicion of gross negligence manslaughter in connection with the collision.” The man, who was not named by police, has not been charged.

U.K. officials were watching for damage to birds and sea life after jet fuel from a ruptured tank poured into the North Sea when the Portugal-registered container ship Solong broadsided the U.S.-flagged tanker MV Stena Immaculate on Monday. The collision sparked explosions and fires that burned for more than 24 hours.

Footage filmed from a helicopter on Tuesday morning showed the fire appeared to largely be out on the tanker, which had a large gash on its port side.

The U.K. coast guard agency said Tuesday that “the Solong is still alight and the fire on board the Stena Immaculate has greatly diminished.” It said the cargo ship was drifting south, away from the tanker, and a 1 kilometer (around a ½ mile) exclusion zone had been put in place around both ships. The government said the cause of the collision was being investigated, but there was no indication of foul play.

“No sign of pollution from vessels is observed at this time,” Transport minister Mike Kane told lawmakers in the House of Commons. But he cautioned that it was a fast-changing situation, and said the cargo ship is likely to sink.

The government said air quality readings were normal and the risk to public health onshore was “very low.”

The collision triggered a major rescue operation by lifeboats, coast guard aircraft and commercial vessels in the foggy North Sea.

All but one of the 37 crew members from the two vessels were brought safely ashore in the port of Grimsby, about 150 miles (240 kilometers) north of London, with no major injuries. One crew member was missing, and the coast guards called off the search late Monday.

“Our working assumption is that, very sadly, the sailor is deceased.” Kane said.

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The U.K. Marine Accident Investigation Branch has begun gathering evidence of what caused the Solong, bound from Grangemouth, Scotland, to Rotterdam, Netherlands, to hit the stationary tanker, which was anchored about 10 miles (16 kilometers) off the English coast.

The investigation will be led by the U.S. and Portugal, the countries where the vessels are flagged.

The 183-meter (596-foot) Stena Immaculate was operating as part of the U.S. government’s Tanker Security Program, a group of commercial vessels that can be contracted to carry fuel for the military when needed. Its operator, U.S.-based maritime management firm Crowley, said that it was carrying 220,000 barrels of Jet-A1 fuel in 16 tanks, at least one of which was ruptured.

The company said that it was unclear how much fuel had leaked into the sea.

The owner of the Solong, shipping company Ernst Russ, said that contrary to earlier reports, the vessel wasn’t carrying containers of sodium cyanide, which can produce harmful gas when combined with water. It said that four empty containers had previously contained the chemical.

“Our team is actively engaged with all local authorities, and we will work with cleanup teams to ensure every effort is made to mitigate further impacts on the marine environment,” the company said in a statement.

Greenpeace U.K. said that it was too early to assess the extent of any environmental damage from the collision, which took place near busy fishing grounds and major seabird colonies.

Environmentalists said that oil and chemicals posed a risk to sea life, including whales and dolphins and to birds, including puffins, gannets and guillemots that live on coastal cliffs.

Tom Webb, senior lecturer in marine ecology and conservation at the University of Sheffield, said that wildlife along that stretch of coast “is of immense biological, cultural and economic importance.”

“In addition to the wealth of marine life that is present all year round, this time of the year is crucial for many migratory species,” he said.

Alex Lukyanov, who models oil spills at the University of Reading, said that the environmental impact would depend on multiple factors, including “the size of the spill, weather conditions, sea currents, water waves, wind patterns and the type of oil involved.”

“This particular incident is troubling because it appears to involve persistent oil, which breaks up slowly in water,” he said. “The environmental toll could be severe.”

By MICHELLE CHAPMAN, Associated Press Business Writer

Southwest Airlines said Tuesday that it will begin charging customers a fee to check bags, abandoning a decades-long practice that executives had described last fall as key to differentiating the budget carrier from its rivals.

Southwest, which built years of advertising campaigns around its policy of letting passengers check up to bags for free, said people who haven’t either reached the upper tiers of its Rapid Rewards loyalty program, bought a business class ticket or hold the airline’s credit card will have to pay for checked bags.

The airline did not outline the fee schedule but said the new policy would start with May 28 bookings.

“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” Southwest Airlines CEO Bob Jordan said in a statement.

Less than a year ago, the Dallas-based airline announced it was doing away with another tradition, the open-boarding system it has used for more than 50 years. Southwest expects to begin operating flights with passengers in assigned seats next year.

Southwest has struggled recently and is under pressure from activist investors to boost profits and revenue. The airline reached a truce in October with hedge fund Elliott Investment Management to avoid a proxy fight, but Elliott won several seats on the Southwest board.

The airline announced last month that it was eliminating 1,750 jobs, or 15% of its corporate workforce, in the first major layoffs in the company’s 53-year history.

The job cuts, which were scheduled to be mostly completed by the end of June, are part of a plan to slash costs and transform the company into a “leaner, faster, and more agile organization,” Jordan said at the time.

Southwest’s stock rose more than 6% before the market open Tuesday.

FILE – Travelers wait at the check-in counter for Southwest Airlines in Denver International Airport Thursday, Dec. 19, 2024, in Denver. (AP Photo/David Zalubowski, File)

As recently as Southwest’s investor day in late September, airline executives described the bags-fly-free as the most important feature in setting Southwest apart from rivals. All other leading U.S. airlines charge for checked luggage, and Wall Street has long argued that Southwest was leaving money behind.

The airline estimated in September that charging bag fees would bring in about $1.5 billion a year but cost the airline $1.8 billion in lost business from customers who chose to fly Southwest because of its generous baggage allowance.

Southwest said Tuesday that it would continue to offer two free checked bags to Rapid Rewards A-List preferred members and customers traveling on Business Select fares, and one free checked bag to A-List members and other select customers. Passengers with Rapid Rewards credit cards will receive a credit for one checked bag.

People who don’t qualify for those categories will get charged to check bags. The airline said that it also would roll out a new, basic fare on its lowest priced tickets when the change takes effect.

In a regulatory filing, Southwest disclosed that it now anticipates first-quarter revenue per available seat mile will be up 2% to 4%. Its prior forecast was for an increase of 5% to 7%. The airline said it expects capacity to be down about 2%.

The airline announced last year that along with giving passengers assigned seats, it would charge them extra for with more legroom and offer red-eye flights.

By JOSH BOAK, Associated Press

WASHINGTON (AP) — President Donald Trump said Tuesday that he will double his planned tariffs on steel and aluminum from 25% to 50% for Canada, escalating a trade war with the United States’ northern neighbor.

Trump said on social media that the increase of the tariffs set to take effect on Wednesday is a response to the price increases that the provincial government of Ontario put on electricity sold to the United States.

“I have instructed my Secretary of Commerce to add an ADDITIONAL 25% Tariff, to 50%, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Trump posted Tuesday on Truth Social.

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The U.S. president has given a variety of explanations for his antagonism of Canada, saying that his separate 25% tariffs are about fentanyl smuggling and voicing objections to Canada putting high taxes on dairy imports that penalize U.S. farmers. But he continued to call for Canada to become part of the United States as a solution, a form of taunting that has infuriated Canadian leaders.

“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Trump posted on Tuesday. “This would make all Tariffs, and everything else, totally disappear.”

The U.S. stock market promptly fell following his social media post, triggering more concerns after a brutal selloff on Monday that puts Trump under pressure to show he has a legitimate plan to grow the economy instead of perhaps pushing it into a recession.

Trump was set to deliver a Tuesday afternoon address to the Business Roundtable, a trade association of CEOs that during the 2024 campaign he wooed with the promise of lower corporate tax rates for domestic manufacturers. But his tariffs on Canada, Mexico, China, steel, aluminum — with plans for more to possibly come on Europe, Brazil, South Korea, pharmaceutical drugs, copper, lumber and computer chips — would amount to a massive tax hike.

The stock market’s vote of no confidence over the past two weeks puts the president in a bind between his enthusiasm for taxing imports and his brand as a politician who understands business based on his own experiences in real estate, media and marketing.

Harvard University economist Larry Summers, a former treasury secretary for the Clinton administration, on Monday put the odds of a recession at 50-50.

“All the emphasis on tariffs and all the ambiguity and uncertainty has both chilled demand and caused prices to go up,” Summers posted on X. “We are getting the worst of both worlds – concerns about inflation and an economic downturn and more uncertainty about the future and that slows everything.”

The investment bank Goldman Sachs revised down its growth forecast for this year to 1.7% from 2.2% previously. It modestly increased its recession probability to 20% “because the White House has the option to pull back policy changes if downside risks begin to look more serious.”

Trump has tried to assure the public that his tariffs would cause a bit of a “transition” to the economy, with the taxes prodding more companies to begin the years-long process of relocating factories to the United States to avoid the tariffs. But he set off alarms in an interview broadcast on Sunday in which he didn’t rule out a possible recession.

“I hate to predict things like that,” Trump said on Fox News Channel’s “Sunday Morning Futures.” ”There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of — it takes a little time. It takes a little time. But I don’t — I think it should be great for us. I mean, I think it should be great.”

The promise of great things ahead did not eliminate anxiety, with the S&P 500 stock index tumbling 2.7% on Monday in an unmistakable Trump slump that has erased the market gains that greeted his victory in November 2024. The S&P 500 index fell roughly 0.4% in Tuesday morning trading.

The White House after the markets closed on Monday highlighted that the tariffs were prompting companies such as Honda, Volkswagen and Volvo to consider new investments in U.S. factories.

It issued a statement that Trump’s combination of tariffs, deregulations and increased energy production had led industry leaders to promise to “create thousands of new jobs.”

The significance of thousands of additional jobs was unclear, as the U.S. economy added 2.2 million jobs last year alone, according to the Bureau of Labor Statistics.