President Donald Trump’s proposed tariffs could have inadvertently created ideal conditions for a reimagined U.S. Virgin Islands shipping industry, maritime insiders have said.
Creating a first-ever U.S. Virgin Islands shipping registry would allow cargo vessels and other commercial ships the assurances that come with U.S. jurisdiction but not the regulatory baggage mandated by federal codes on the mainland, said Eric Dawicki, president of the Northeast Maritime Institute.
Dawicki and others from the Center for Ocean Policy and Economics floated the plan for a USVI shipping registry — commonly known as a ship’s flag state — in late 2021, when the COVID-19 pandemic caused upheaval in the global supply chain. In February 2022, Dawicki signed a memorandum of understanding with Gov. Albert Bryan Jr. to revitalize the U.S. maritime industry, beginning with creating an open registry in the Virgin Islands. This new flag state would allow foreign container, cruise, tanker, and other commercial vessels to register in the territory. Those ships, however, will be held to the highest safety, labor, and environmental standards, Dawicki said.
Three years later, the plan has reportedly reached the Trump White House, which threw global shipping into question by announcing steep tariffs on almost all goods arriving at U.S. ports — including up to 145 percent on Chinese merchandise.
“The rising wave of protectionist economic policies, including proposed tariffs and decoupling from adversarial supply chains, has exposed the vulnerability of America’s maritime logistics,” Dawicki told the Source Friday. “While no formal announcement was made at the time, we understood through back-channel briefings and maritime advisers aligned with administration policy that there was appetite for bold, private-sector-driven initiatives — particularly ones that bypass burdensome domestic regulatory constraints while reinforcing U.S. control and economic return. This project is bold, but is a proven successful model being driven by friends and foes around the world who have exposed maritime trade and commerce policy as substandard.”
More than 90 percent of international sea trade relies on foreign-flagged vessels, he said. A Virgin Islands shipping registry would both serve as a diplomatic tool and help the United States recapture market share.
Currently, that market is dominated by Liberia, Panama, and the Marshall Islands. These so-called flag-of-convenience states have been criticized for lax oversight that could lead to labor abuses, irresponsible environmental policies, and opaque financial reporting rules favored by criminals.
“With Panama and other registries under scrutiny for weak oversight or corruption, the time is right for a transparent, secure U.S.-affiliated option to dominate the high-value, security-sensitive shipping space,” Dawicki said. “A USVI flag offers a U.S.-controlled but globally competitive registry that isn’t handcuffed by U.S. Code of federal regulations burdens, and it allows the U.S. to project sovereignty over its fleet without stifling it with outdated frameworks.”
If coupled with a shipyard on St. Croix’s south shore, it could also entice private investors to the tune of $2.3 billion for port infrastructure to launch the project, Dawicki said. In 2022, the Center for Ocean Policy and Economics estimated 500 people would be needed to build the port and another 2,000 would be hired to work there full time. Thousands of more adjacent jobs would spring up as well, he said.
“Recent inflation and supply chain factors might adjust the initial capital expenditure marginally upward, but public-private partnership models and interest from international partners, including ship finance entities and naval architecture firms have validated the feasibility,” Dawicki said. “The USVI shipyard remains a cornerstone vision for American maritime renaissance.”
Creating a USVI registry and large shipyard in the territory would drastically change the United States’ position in the global shipping industry, he said.
“The registry can and should proceed independently as a commercial and diplomatic tool to recapture market share in global tonnage. However, the shipyard, envisioned as a sovereign U.S. facility capable of constructing, retrofitting, and maintaining both military and commercial vessels, amplifies the value proposition. Together, they create a maritime ecosystem that links policy, fleet, workforce, and industrial capacity under a single American jurisdiction, reducing foreign dependence at every level.”
The USVI is uniquely positioned, registry and shipyard supporters said, because it is both a U.S. territory and outside the customs zone. As importantly, the territory is exempt from the Jones Act and other cabotage rules that limit foreign-built and foreign-crewed ships’ activities.
The plan isn’t without its detractors, however. Mainland unions, protected by rules like the Jones Act, aren’t wild about creating an avenue for more foreign seafarers in U.S. waters, he said.
Dawicki pushed back on this, however, arguing a USVI registry would create jobs and mirror other territorial registries like those of Chinese satellites.
“It excites the global maritime industry to become part of an American-led initiative, one modeled on the proven success of the largest and most dynamic registries in the world including those now used by China through Hong Kong and Macao,” he said. “This isn’t a threat to U.S. labor — it’s an opportunity for economic expansion, job creation, and geostrategic leverage. It’s a chance to build something enduring, where U.S. values, oversight, and operational excellence anchor the flag, not political inertia.”
The U.S. Maritime Administration, the Department of Transportation, Department of Homeland Security, and possibly the State Department would need to coordinate on how the registry would be administered, Dawicki said. It would also need congressional support, particularly from the USVI delegate, and various maritime committees “to reinforce legitimacy and signal to international stakeholders that the U.S. is serious about reclaiming leadership in global shipping,” Dawicki said.
“None of the hurdles ahead are insurmountable and in fact, they mirror the same institutional steps that were taken when Panama and Liberia emerged as dominant registries in the past and continue to rule the waves with China in a close third place using this exact system. The difference now is that America has the chance to lead again, through the USVI, on its own terms,” he said.
