The Trump administration is evaluating a proposal to establish an international shipping registry in the U.S. Virgin Islands. This initiative aims to boost the number of vessels flying the American flag, thereby enhancing the U.S. commercial shipping fleet’s capacity to support military logistics during conflicts and reducing reliance on foreign ships for transporting supplies across oceans. Currently, the U.S. flag fleet comprises approximately 187 vessels, but only about 80 are actively engaged in international trade. In stark contrast, China controls at least 5,500 vessels, highlighting a significant disparity in maritime capabilities.
The challenges facing the U.S. flag registry include high operational costs, a larger tax burden, and strict regulations requiring U.S. citizen crews, which have deterred many ship owners for decades. Utilizing the U.S. Virgin Islands could resolve some of these challenges. According to Eric Dawicki, president of the Center for Ocean Policy and Economics (COPE), the island territory could offer a U.S.-controlled flag with fewer restrictions than conventional U.S. registrations. All commercial vessels must register with a particular country to comply with safety and environmental standards, making this proposal potentially appealing, despite concerns from unions and proponents of domestic shipbuilding.
Many U.S.-flagged ships operate under the century-old Jones Act, which enforces stringent criteria regarding ownership, construction, and crew nationality. These regulations were designed to support American shipowners but have ultimately hindered fleet growth, as noted by Basil Karatzas, a shipping consultant. The creation of a registry in the U.S. Virgin Islands was initially proposed in 2022 but gained traction under the current administration, which is focusing on revitalizing U.S. shipbuilding and expanding the U.S. fleet. Recent legislative measures, such as the bipartisan SHIPS for America bill, seek to secure funding for the maritime industry.
A USVI registry could complement these efforts without undermining existing cabotage laws or the Jones Act.