Case wants US ships repaired by South Korea and Japan, rather than China

US Reps. Ed Case (D-Hawaiʻi) and James Moylan (R-Guam) are proposing new legislation that would encourage US maritime companies to work with allies such as Japan and South Korea on major ship repairs and modifications—rather than rely on shipyards in China.

The bipartisan measure, called the Merchant Marine Allies Partnership Act, was introduced in the House this month. It seeks to amend the 1920 Jones Act, a federal law that limits domestic shipping to US-built, -owned and -operated vessels.

Case and Moylan say loopholes in the law currently allow Jones Act carriers to conduct major ship repairs and modifications in foreign countries—primarily China—while still benefiting from the law’s protections.

“These modifications are not minor,” Case said in a statement, “and often include full engine replacements, liquefied natural gas conversions and other critical overhauls.”

He claimed that these modification, through further loopholes, largely avoid the 50% import duty imposed on foreign ship repair, allowing companies to maximize profits while circumventing the spirit of the law.

The lawmakers argue that continued reliance on shipyards in China poses national security risks and contributes to higher shipping costs for remote US regions such as Hawaiʻi, Guam and Alaska.

“By closing loopholes that benefit the People’s Republic of China and instead partnering with trusted allies like Japan and South Korea, we can grow our shipbuilding capacity, support good-paying jobs and deliver real relief for families and businesses,” Moylan said.

The new bill would:

• Waive the 50% tax on major vessel modifications when the work is done in allied countries
• Allow US companies to purchase ships from those allies and still qualify for Jones Act exemptions
• Provide a path for foreign-built, foreign-crewed vessels from allied nations to participate in US coastal trade under regulated conditions

The two lawmakers introduced three other measures at the start of 2025 that would exempt places like Hawaiʻi and Guam from the Jones Act entirely, allow vessels outside Jones Act requirements to serve US regions where monopolies or duopolies have developed in the shipping industry, add rate caps, among other changes to the law.

Full text of the Merchant Marine Allies Partnership Act is available here.