America’s diminishing capacity to build the tools of modern power. From textiles to high-tech electronics to warships, trade deficits and decaying infrastructure now highlight the long-term erosion of the U.S. industrial core.
The American heartland, once the world’s most productive workshop, is now marked by hollowed-out factories, aging plants, and dependence on foreign suppliers for everything from semiconductors to steel. Most alarmingly, these vulnerabilities extend deeply into the defense sector—at a time when global tensions are rising and the prospect of sustained great-power conflict is no longer theoretical.
This is the new front in the fight for American security: the revival of the defense-industrial base.
In 1950, America was the world’s unchallenged industrial titan, responsible for more than half of global manufacturing output. The U.S. was the engine of victory in World War II, its factories churning out ships, planes, and tanks at unmatched speed. By 1960, America still accounted for over a third of global manufacturing. Today? The figure hovers under 16%.
Worse still, the United States now ranks third in global manufacturing output—trailing behind China and, incredibly, Germany, whose economy is one-third the size of America’s.
This shift is not merely statistical. It is strategic.
China is now the world’s largest manufacturer by a wide margin. It dominates global trade in everything from electric vehicles to shipbuilding. Most troubling, however, is that this economic strength is being leveraged to build the world’s largest navy, develop advanced missile systems, and expand its footprint in key sectors like port logistics and aerospace.
The U.S., by contrast, is losing ground in almost every area where industrial muscle meets military capability.
The maritime sector is perhaps the clearest window into America’s industrial decline.
Today, less than 1% of the world’s ships are built in the United States. That includes vessels for the U.S. Navy, which requested funds to build just six new ships in its 2025 budget. For perspective: China builds over 1,000 commercial ships annually.
In total, about five commercial vessels are produced in the U.S. each year. Five.
Compare that with China, which controls more than 50% of global shipbuilding capacity. Seven of the top 10 global shipbuilders, by volume, are Chinese. China’s navy now boasts the largest fleet on the planet, and it is both newer and more technologically advanced than much of America’s.
The average U.S. Navy ship is 19 years old. Over 70% of Chinese naval vessels have been launched since 2010. That matters in any future confrontation.
Beyond shipbuilding, China is also dominating global shipping logistics and port infrastructure. Three of the world’s top 10 shipping companies are Chinese. America’s largest, Matson, ranks 28th.
On the port side, seven of the world’s ten busiest and most automated ports are in China. The U.S. doesn’t even crack the top 20. Long Beach and New York, America’s biggest ports, rank 22nd and 24th.
This infrastructure gap means that in a global conflict or trade disruption, America would struggle to project force, transport goods, or maintain logistical superiority.
And that has enormous implications for national security.
Some critics point to domestic regulations, such as the Jones Act, as culprits. The century-old law requires that all goods shipped between U.S. ports be transported on ships built, owned, and operated by Americans. Its goal was to preserve national shipping capacity.
In practice, many economists argue, it’s done the opposite—discouraging shipbuilding and driving up costs, while failing to maintain a competitive industry.
But the bigger issue isn’t regulatory. It’s industrial.
Any serious defense-industrial effort requires a robust steel sector. America’s, once the envy of the world, is now dangerously diminished.
U.S. Steel, long the symbol of American industrial might, ranks just 28th globally. In 2024, Nippon Steel, a Japanese firm, attempted to acquire it. The deal was vetoed by President Joe Biden, citing national security concerns and political pressure—especially from steelworkers in battleground Pennsylvania.
Critics called the move protectionist and shortsighted. Supporters called it patriotic.
In May 2025, Donald Trump reversed course and supported the acquisition—with conditions: $14 billion in new investment, an all-American board, retention of the U.S. Steel name, and headquarters remaining in Pittsburgh. It was a nationalist-globalist compromise.
The broader message was clear: America needs allies to rebuild its industrial base—but not at the cost of its sovereignty.
Here lies the paradox. America cannot rebuild its manufacturing muscle without global help—particularly from democratic allies like Japan and South Korea. These nations lead in critical sectors like shipbuilding, steel, and heavy machinery. They also bring capital and know-how that America has allowed to atrophy.
In 2024, Japanese and South Korean firms began repairing U.S. Navy vessels under new agreements. A South Korean company acquired and is now modernizing the historic Philadelphia Naval Shipyard—once the pride of the U.S. fleet.
This is the model going forward: strategic cooperation without dependence. Allies can help rebuild capacity, but America must lead the way in scale and strategic direction.
What does America need? Scale. Speed. And will.
Reviving industrial sectors like steel, shipbuilding, machine tools, and capital goods will require large-scale investments. These can’t come solely from government. They must be driven by market incentives—supported by clear national strategies and, where necessary, public-private partnerships.
This is not about nostalgia for a vanished manufacturing past. It’s about preparing for the kind of industrial warfare that may define the next major global conflict.
The Ukraine war is a warning. It has shown that artillery shells, armored vehicles, and drones matter—but so do the factories behind them. A war of attrition favors those who can outproduce.
Today, that’s not America.
Tariffs alone are not the answer. They may offer temporary relief, but they don’t build factories or train skilled workers. A real revival requires more:
Industrial policy that identifies key sectors vital to national security.
Workforce development that rebuilds a skilled labor base.
Allied cooperation that brings in expertise and investment.
R&D funding that ensures the U.S. stays ahead in critical technologies.
The U.S. defense-industrial base needs to be seen not just as a supplier of weapons, but as a pillar of sovereignty, resilience, and deterrence.
There is a cost to rebuilding. But the cost of doing nothing is higher.
If the U.S. fails to reverse its industrial decline, it risks being unable to sustain military operations in a future war. It risks strategic blackmail by adversaries who control key supply chains. And it risks watching its global influence continue to erode.
Rebuilding the defense-industrial base must become a bipartisan national mission. That means resisting the temptation to politicize every investment, every merger, every decision about ports or steel mills. It means long-term thinking in a political system addicted to short-term wins.
The stakes are stark.
This is not just about keeping up with China. It’s about reestablishing America’s ability to defend itself and support allies in an era of renewed great-power competition. It’s about securing a future where the U.S. can still set terms, shape norms, and respond with force if needed.
Rebuilding America’s defense-industrial base won’t happen overnight. It will take a decade of sustained focus. But if done right, it could become the defining achievement of a generation.
