South Korean shipbuilding giants will be investing billions of dollars in America’s shipbuilding industry, the White House announced Wednesday after President Donald Trump’s meetings in South Korea this week.
The new deals include programs for ship construction and maintenance, modernizing shipyards, and addressing workforce issues, all serious problems that have afflicted America’s shipbuilding industry for decades.
South Korean President Lee Jae Myung’s chief of staff for policy, Kim Yong-beom, said that South Korea will invest $150 billion in American shipbuilding, per local media. And the White House shared details of some investments by major South Korean companies coming down the line.
Top South Korean shipbuilder HD Hyundai and American investment firm Cerberus Capital Management are partnering on a $5 billion investment plan aimed at “modernizing American shipyards, strengthening supply chains, and applying new technologies like autonomous navigation, digitalization, and automation,” the White House said in a fact sheet.
Hanwha Ocean, another prominent South Korean shipbuilder, will invest another $5 billion in its Philly Shipyard workforce in Pennsylvania “and increase its current production capacity by more than ten-fold,” the White House said. The company acquired the shipyard last year.
US Navy officials have praised South Korea’s shipyards for their digital precision and real-time oversight of construction and supply chains — tools that could help modernize America’s struggling shipbuilding sector. Investments in the US workforce could also pay off, as low pay, labor shortages, and inadequate recruitment and retention continue to hinder American shipyards.
The new US deal with South Korea also includes new construction, shipyard automation, and maintenance, repair, and overhaul programs by South Korean shipbuilder Samsung Heavy Industries and US company Vigor Marine Group.
South Korean shipbuilders have previously completed repairs on US Navy ships. Hanwha finished maintenance on the USNS Wally Schirra, a Military Sealift Command Lewis and Clark-class dry cargo ship, earlier this year, and HD Hyundai won a repair contract for the USNS Alan Shepard, a ship of the same class, a few months ago.
“Leveraging the expertise of these highly capable shipyards enables timely maintenance and repairs for our vessels to operate at peak performance,” Navy Secretary John Phelan said during an April visit to South Korean shipyards.
The shipbuilding deals are a product of larger tariff and trade negotiations between Seoul and Washington, which for months have included the prospect of South Korea helping with US shipbuilding through investments dubbed “Make American Shipbuilding Great Again.”
Relying on US allies and partners in the Pacific, like South Korea and Japan, for shipbuilding is of interest to Congress and the Trump administration, as well as US shipbuilders. Earlier this month, Trump touted “hundreds of billions of dollars in new investments and people coming from all around the world, and they’re gonna build ships in America.”
South Korea and Japan are, respectively, the second and third largest shipbuilders in the world, behind China, which dominates commercial shipbuilding and uses its dual-use yards, workforce, and equipment to churn out military vessels at a rapid pace.
China has approached the expanding shipbuilding partnership between South Korea and the US with increasing unease. Earlier this month, it sanctioned five of Hanwha’s US subsidiaries, including Hanwha Philly.
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