Why did the United States, during the unipolar moment, act against its long-term strategic interest by choosing not to invest in its commercial shipbuilding industry? This decision is especially puzzling considering that China, the United States’ current peer competitor and potential naval adversary, started publicly investing in and emphasizing the strategic importance of its sector during the same time. I argue that the United States’ adherence to and belief in a liberal foreign policy during the unipolar moment is chiefly to blame. Believing that China could rise without challenging its security, the United States discounted the risk of a security competition and naval conflict with it in the future. As a result, the U.S. had no reason to be concerned with China’s growing dominance of commercial shipbuilding or invest in its uncompetitive commercial sector. This only changed after the United States recognized both the threat China would pose to its security and the challenges its industrial base would face supporting a protracted, large-scale conventional war.