In a high-stakes bid to counter the People’s Liberation Army Navy’s (PLAN) expanding maritime power, the US Navy’s ambitious plan to add 85 ships to its fleet comes with a jaw-dropping price tag of US$1 trillion, according to an analysis by the Congressional Budget Office (CBO) released on January 6.
The CBO’s report focuses on the Navy’s long-term shipbuilding plans, specifically the 2025 version of its 30-year blueprint for fleet expansion. The primary goal of this plan is to build a fleet of 381 manned ships, which is a target outlined in the 2023 Navy Battle Force Ship Assessment and Requirement report.
To meet this ambitious goal, the Navy would need to spend an estimated US$40.1 billion annually—approximately double the amount Congress has allocated for shipbuilding over the past five years.
The 30-year plan envisions growing the Navy’s fleet from the current 296 manned ships to 381 manned vessels, along with 134 unmanned surface and subsurface vehicles.
This overall expansion of 85 ships is expected to cost a staggering US $1 trillion, according to the CBO’s analysis, highlighting the immense financial burden that such an expansion would place on the US military budget.
The report pointed out that the cost of this expansion is not only high compared to recent funding levels but also historically significant. Over the past decade, shipbuilding funding reached its highest levels since the Reagan Administration’s defense buildup in the 1980s.
Between 1955 and 1989, during the Cold War, the average funding for shipbuilding was around US $32.8 billion annually (in 2024 dollars), a period marked by intense competition with the Soviet Union.
Despite the planned expansions, the Navy’s fleet is expected to experience a decline in the coming years. According to the CBO analysis, by 2027, the fleet will reach its smallest size in decades, with the number of ships commissioned falling short by 13 compared to those retired.
This will bring the fleet down to a low of 283 ships. However, the expansion is projected to resume in the 2030s as the Navy continues its long-term build-up.
While the 2025 shipbuilding plan will initially reduce the number of ships capable of launching missiles and torpedoes, this capability is expected to grow as the fleet expands in the following decades.
However, the report notes that the Navy will need to build up its munitions inventory to fully capitalize on the increased capacity of its growing fleet.
China’s Naval Expansion
The US Navy’s shipbuilding strategy is shaped by the intensifying maritime competition with China, particularly in the Western Pacific. With decades of investment in its naval capabilities, China now commands the largest fleet globally by hulls and is building new warships much faster than the US. This rapid build-up has raised alarms within both the Pentagon and Congress.
In 2024, it was revealed that US Navy shipbuilding had reached its lowest production levels in 25 years, putting the US behind China in terms of production speed.
At the time, Eric Labs, a seasoned naval analyst at the Congressional Budget Office, stated that the US Navy’s shipbuilding is now in “a terrible state.” He further noted that there is no quick or easy solution to the problem, pointing to the long-term nature of the challenge.
This decline in production presents key challenges for the US Navy, particularly in the event of a conflict with China. The Navy’s fleet, composed of aging aircraft carriers, destroyers, and submarines, is grappling with extensive maintenance and repair backlogs.
At the same time, the Navy’s capacity to build new ships is not keeping pace with the demands. The delays and cost overruns in new ship construction reflect a broader issue—the erosion of the US shipbuilding industry.
The Indo-Pacific region is where the stakes are highest. If not operating at full strength, the US Navy could find itself at a disadvantage against China’s rapidly expanding naval forces and its growing stockpiles of anti-ship missiles.
In such a scenario, American warships could face heavy losses, and the US industrial base might not be equipped to repair or replace them quickly enough.
Moreover, the US Navy’s shipbuilding efforts are concentrated among a few major contractors: Huntington Ingalls Industries, responsible for aircraft carriers, submarines, amphibious ships, and destroyers; General Dynamics, which handles submarines, destroyers, and support ships; and Fincantieri Marinette Marine Corporation, tasked with producing frigates.
As a result, in recent years, the United States has been exploring the option of partnering with allies, including India, Japan, and South Korea, to utilize their shipyards for conducting regular overhauls and maintenance on US Navy warships.
On the other hand, China’s shipyards are rapidly producing warships and commercial vessels. This gives China a clear advantage, as it can absorb losses more easily and outbuild the US Navy in sheer volume.
That being said, the CBO’s new report stresses that the industrial base must significantly expand to meet the demand for new ships.
“Over the next 30 years, the nation’s shipyards would need to produce substantially more naval tonnage than they have produced over the past 10 years. The rate of production of nuclear-powered submarines, in particular, would need to increase significantly,” the report states.
It adds that over the past ten years, the tonnage under construction at US shipyards has risen by 80 percent. Under the 2025 plan, the Navy’s demand for naval tonnage will increase further, though the need will vary across different types of ships.
While aircraft carrier production is expected to remain steady, the construction of submarines, surface combatants, and amphibious warfare ships will need to increase by an average of 50 percent from 2030 to 2054 compared to current levels.
The Navy, along with the two nuclear shipyards—General Dynamics Electric Boat and HII’s Newport News Shipbuilding—are working to expand their capacity to build both Virginia-class attack submarines and Columbia-class nuclear ballistic missile submarines.
Despite the Navy purchasing two submarines annually, the yards have only been producing 1.2 per year, according to the report.
The Navy estimates that it will need 100,000 additional workers in the submarine industrial base over the next decade. However, the report notes that it remains uncertain whether these efforts will increase the production of attack submarines.
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