The only case I can see for subsidies would be in exchange for repeal of the Jones Act’s US-built requirement. Basically, replace a de facto shipbuilding subsidy with an explicit subsidy. But I think the optimal policy would be no subsidy. Right now we build 2-3 ships per year, and that is about to start trending down (the 3 ship per year average of the past 20 years was due to some one-off factors such as the need to replace old tankers due to OPA 90 and the need to transport crude after the fracking boom kicked off – a moot point now with the end of the oil export ban). I don’t think those few ships are what stands between the country being able to build large ships or not. What’s really keeping that capability in place is government contracts, which currently account for ~80% of shipbuilding and repair revenue. I mean, some of the country’s largest shipyards build zero commercial ships (Newport News, Bath Iron Works, Ingalls, Electric Boat).
As for why U.S.-built ships are so expensive, there are many reasons. But I also think it is a predictable result of having the JA’s US-built requirement and, from the 1930s until 1980, construction differential subsidies. Those are both big disincentives to becoming internationally competitive. But there are other factors. One big one is the lack of economies of scale. Most recent orders of JA ships have been for two. Maybe a few orders for four ships (tankers). In contrast, overseas you can get orders for a dozen ships of a particular class, or even more. That means you can spread your fixed costs across more vessels, you get lessons learned that can be applied to future vessels in the series, and you get a better price from suppliers on inputs like steel and components. US-built is also a disincentive to specialization and finding a competitive niche. US shipbuilders are basically jacks of trade, masters of none. In contrast, the Dutch are among the best at dredging vessels, the South Koreans at LNG tankers, the Finns at icebreakers, the Norwegians at fishing vessels and OSVs, etc. while the Americans have no real commercial specialty outside of maybe river barges. You can find more about this here: https://www.cato.org/policy-analysis/rust-buckets-how-jones-act-undermines-us-shipbuilding-national-security
People like to bring up wages, but a) U.S. shipbuilding wages aren’t particularly high (see pg.32: https://www.nassco.com/pdfs/Shipbuilder-Assessment-American-Marine-Highway-NASSCO.pdf) and b) this would be a more compelling explanation if we still weren’t being beaten on price by high-wage European yards: https://twitter.com/cpgrabow/status/1428764866714681347
And yes, Philly is backed up with the NSMV and NASSCO with the John Lewis class oilers. American yards would struggle to build LNG carriers. Note: https://www.gao.gov/assets/gao-16-104.pdf
Representatives from one shipyard roughly estimated that for an order of one large LNG carrier they might hire about 1,000 short-term U.S. workers and hire an additional 250 to 300 skilled Korean workers for the duration of the build time to ensure the work is done correctly. However, if they had contracts for a larger number of carriers, they would likely hire fewer Korean workers, who would gradually be transitioned out as U.S. workers were trained to complete the work. A representative from the second shipyard stated that the skills needed to build the LNG containment system do not exist in their current workforce, so for an order of two LNG carriers, they would likely hire skilled foreign shipyard workers to do the work in order to mitigate risk and increase schedule predictability, even if the costs of employing a foreign workforce may be slightly higher than using U.S. workers.
