The U.S. Navy Can’t Build Ships

After decades of strategic drift and costly acquisition failures, the U.S. Navy is sailing straight into a storm it can’t avoid. Despite the Defense Department’s lip service about China being the “pacing challenge,” decades of deindustrialization and policymakers’ failure to prioritize among services and threats have left the Navy ill-equipped to endure a sustained high-intensity conflict in the Pacific. The United States is unable to keep pace with Chinese shipbuilding and will fall even further behind in the coming years. Where does that leave the U.S. Navy and the most critical U.S. foreign-policy imperative: deterring a war in the Pacific?

As evidenced by the Biden administration’s latest budget request, fiscal constraints are forcing the Navy to cut procurement requests, delay modernization programs, and retire ships early. The Navy’s budget for the 2025 fiscal year calls for decommissioning 19 ships—including three nuclear-powered attack submarines and four guided-missile cruisers—while procuring only six new vessels. The full scope of what military analysts have long warned would be the “Terrible ’20s” is now evident: The expensive upgrading of the U.S. nuclear triad, simultaneous modernization efforts across the services, and the constraint of rising government debt are compelling the Pentagon to make tough choices about what it can and cannot pay for.

Workforce shortages and supply chain issues are also limiting shipbuilding capacity. The defense industrial base is still struggling to recover from post-Cold War budget cuts that dramatically shrank U.S. defense manufacturing. The Navy needs more shipyard capacity, but finding enough qualified workers for the yards remains the biggest barrier to expanding production. The shipbuilding industry is struggling to attract talent, losing out to fast food restaurants that offer better pay and benefits for entry-level employees. At bottom, it is a lack of welders, not widgets, that must be overcome if the U.S. Navy is to grow its fleet.

Instead, the shipbuilding outlook is progressively worsening. An internal review ordered by Navy Secretary Carlos Del Toro in January found that major programs, including submarines and aircraft carriers, face lengthy delays. Even the Constellation-class frigates, touted as a quick adaptation of a proven European design, are delayed by three years.

As defense analyst David Alman outlined in a prize-winning essay for the U.S. Naval Institute’s Proceedings, the United States simply can’t win a warship race with China. The United States effectively gave up on commercial shipbuilding during the Reagan administration in the name of free trade. In the decades that followed, generous state subsidies helped China dominate commercial shipbuilding, and Beijing’s requirement that the sector be dual-use resulted in an industry that can shift to production and ship repair for the military during a conflict, much as U.S. shipyards did during World War II. The U.S. Office of Naval Intelligence estimates that China now has 232 times the shipbuilding capacity of the United States. China built almost half the world’s new ships in 2022, whereas U.S. shipyards produced just 0.13 percent.

Rebuilding the arsenal of democracy that anchored the U.S. victory at sea 80 years ago won’t happen overnight or cheaply—it is a generational project. The 20-year Shipyard Infrastructure Optimization Program aimed at upgrading dry docks, facilities, and equipment will end up costing well over the projected $21 billion. But the plan is only intended to maximize existing U.S. industrial capacity and won’t do much to close the enormous shipbuilding gap with China. That would require a reconstitution program on par with the series of maritime laws passed after World War I, which supported the expansion of an industrial base eventually capable of turning out thousands of carriers, destroyers, submarines, frigates, and cargo ships for the Atlantic and Pacific fleets.

Realizing that U.S. shipyards are stretched thin, policymakers have begun looking abroad. Del Toro encouraged South Korean companies to invest in U.S. naval shipping during a visit this year. Japan will likely begin performing repair and maintenance work on U.S. warships soon; India agreed to do so last year. These initiatives will alleviate the increasing maintenance backlog at U.S. facilities, but it would take a large share of the combined Japanese and South Korean shipyard capacity to fundamentally alter the growing disparity between the U.S. and Chinese fleet size in the Western Pacific.

Ships are not all comparable, of course. U.S. warships are heavier and more capable than China’s, although a dearth of logistics vessels and sealift capability are major concerns. Still, the current era of missile warfare has magnified the importance of fleet size.

Without enough ships to match the Chinese People’s Liberation Army Navy, what can the United States do to maintain conventional deterrence in the Pacific and prevent war? At least two big things: buy missiles and cut back on missions.

First, to manage risk in the short term, the Navy and the other services need to rapidly procure more munitions—focusing on weapons and capabilities, not the platforms that carry them.

The Russia-Ukraine war has military planners thinking less about short, quick conflicts and more about long wars and their vast need for materiel. What holds for depleted stocks of land-based artillery also holds for many of the weapons needed for a war at sea. A much-publicized 2023 wargame conducted by the Center for Strategic and International Studies found that the United States would run out of its entire inventory of the key Long Range Anti-Ship Missile within the first few days of a war over Taiwan. Ramping up the procurement and production of these munitions, as well as Joint Strike Missiles, Standoff Land Attack Missiles, and Harpoon missiles will enable U.S. airpower to help even the odds in the Pacific.

Anti-ship systems operated by the Army and Marines could also complement the other services’ firepower. However, the deployment of ground-based missiles will require allies’ consent. To date, no Asian allies of the United States have volunteered to permanently host U.S. missile batteries, due to political sensitivities and the fact that these countries already have such weapons of their own.

Innovation and creativity could further augment U.S. naval power. Retired U.S. Marine Col. T.X. Hammes, a fellow at the National Defense University, has urged the Navy to convert commercial container ships into warships capable of launching missiles, which would add a tremendous volume of firepower at a bargain price. These “missile merchants” would also require significantly less manpower than traditional warships do, a major consideration given the Navy’s struggle to fill existing billets.

Policymakers also need to make hard choices and limit naval deployments. Though the Navy is shrinking, its missions aren’t. A high operational tempo, manpower shortfalls, and an aging fleet are fueling a readiness crisis that is burning out sailors and ships.

Addressing the readiness crisis requires taking a hard look at which missions are essential for U.S. security and which aren’t. As former Deputy Defense Secretary Robert Work has written, since the fall of the Soviet Union, the Navy has spent 30 years prioritizing global presence over warfighting readiness. The deadly Pacific ship accidents in 2017 involving the USS Fitzgerald and USS John McCain were directly attributable to this unsustainable mania for global presence, according to a Navy review.

The preeminence of presence missions also has more subtle consequences. After 20 years of largely uncontested deployments to the Middle East, the U.S. Navy now has an opponent who shoots back: Yemen’s Houthis. But increased experience in missile and drone defense is outweighed by a deleterious drain on precision munitions. In the conflict with the Houthis, the Navy burned through more Tomahawk land attack missiles in one day than it purchased in all of 2023. Meanwhile, the Houthis can replace all equipment destroyed by U.S. attacks with just two shiploads from Iran, according to Gen. Michael Kurilla, the head of U.S. Central Command.

The costs of maintaining global presence are magnified by the state of Navy recruiting and retention. The service’s recruiting woes are undeniable. The Navy missed all of its recruiting goals in 2023, some by as much as 35 percent. The service projects a shortfall of 6,700 recruits this year, according to its chief personnel officer.

Like the rest of the all-volunteer force, unprecedented recruiting headwinds mean manpower shortages will remain a persistent challenge for the Navy. Absent any change in operational tempo, sailors will work harder, deploy more frequently, and leave the service in greater numbers—ensuring a downward spiral for both manning and readiness.

The United States can’t match the size of China’s fleet in the near or medium term. Deindustrialization, poor procurement choices, and a myopic fixation on the U.S. presence in the Middle East have seen to that. All that said, the U.S. Navy still retains several significant advantages in a potential conflict with China: submarine dominance, overall tonnage, blue-water experience, and support from capable allies. A major increase in joint munitions purchases and an end to the readiness drain of presence deployments to secondary theaters will enhance the Navy’s edge during the potential peak window for a Chinese move on Taiwan over the next decade. The alternative is grim. If conventional deterrence fails, it risks military defeat for the United States or something even more dangerous: nuclear confrontation between the world’s two superpowers.