Laws and Policies for Addressing Overcapacity: The case of the shipbuilding industry

The shipbuilding industry is another sector grappling with a deepening problem of oversupply. Under the second Trump administration, concerns were raised regarding overcapacity and unfair trade practices in China’s shipbuilding industry, leading to measures under Section 301 of the Trade Act of 1974 (though the measure was suspended in November 2025). Similarly, in Japan, the Takaichi administration has designated the shipbuilding industry as one of its strategic sectors, and the future direction of its policies is a subject of keen interest. However, existing frameworks, including the World Trade Organization (WTO), are ill-equipped to adequately address the issue of oversupply in the sector. Furthermore, questions remain regarding the effectiveness of the Section 301 measure introduced by the second Trump administration. Against this backdrop, this paper examines the significance and impact of new frameworks and measures incorporated in bilateral or plurilateral agreements, focusing on Free Trade Agreements (FTAs) and the Agreements on Reciprocal Trade (ARTs) adopted during the second Trump administration. Additionally, the paper explores novel policy approaches that fall outside the scope of traditional frameworks.