US and South Korean companies signed 11 non-binding agreements in the areas of shipbuilding, nuclear energy, aerospace, gas, and critical minerals.
South Korean President Lee Jae Myung is relying on his commitment to “Make America Shipbuilding Great Again” during his formal visit to the US, as the two countries discuss various aspects of their trade agreement. Lee plans to tour a shipyard owned by South Korea’s Hanwha Group to show his investment plans.
As part of South Korea‘s commitment to invest $350 billion in US projects, shipbuilding was one of the key investment areas, with $150 billion allocated to that industry.
Trump has a desire to revitalize shipbuilding in order to compete with China, which is the world’s largest shipbuilder and operates as the largest maritime power.
Lee, when he visits Hanwha’s Philadelphia Shipyard in Philadelphia, one of the largest shipyards in the US, will explain the opportunities and challenges.
Hanwha, which purchased the facility last year, plans to spend $5 billion to increase its production from two vessels annually to 20, according to a statement from Lee’s office. In contrast, Hanwha Ocean’s shipyard in South Korea is ten times bigger and produces a vessel every week.
The K-shipbuilding industry, which boasts the world’s advanced capabilities, will help revive the US shipbuilding industry and create a mutually beneficial historic milestone, Lee remarked during an event at Washington’s Center for Strategic and International Studies following the summit.
During Lee’s visit, US and South Korean companies signed 11 non-binding agreements in the areas of shipbuilding, nuclear energy, aerospace, gas, and critical minerals.
HD Hyundai reached a deal with the state-run Korea Development Bank and Cerberus Capital to create a multibillion-dollar joint investment fund to increase maritime capabilities in the US and its partners for areas like shipbuilding, marine logistics infrastructure, and advanced marine technology.
Samsung Heavy Industries partnered with Vigor Marine Group to collaborate in areas such as maintenance and repair of US Navy ships, shipyard modernization, and joint ship construction.
During tariff talks in July, South Korea offered a package titled “Make America Shipbuilding Great Again,” aimed at modernizing US shipyards, which Seoul highlighted as crucial to reaching an informal trade deal. Experts, industrial insiders, and South Korean officials agree that significant efforts will be required for the US to achieve this goal.
US shipyards, which were once the world’s leading shipbuilders during World War II, declined in market share to 0.04% by 2024. China and South Korea are responsible for 83% of the global commercial shipbuilding market, according to data from the US Trade and Development Agency.
South Korean industry sources stated that training local employees can take from two to five years, and finding people willing to do demanding work at shipyards is challenging. Jeong mentioned that Hanwha is trying to modernize its facilities, train and equip workers, and adapt its production methods to build ships more efficiently. Hanwha also plans to explore using idle docks near the Philly Shipyard to increase construction capacity.
Trump mentioned that some ships for the US would be built in South Korea for the time being. South Korean officials indicated that unless some US protectionist policies are eased, building complete ships or modules meant for US shipyards might be restricted.
Likewise, the Byrnes-Tollefson Amendment restricts the construction of US Navy Ships in foreign shipyards, although the president has the authority to waive this requirement for national security reasons. Some US legislators have suggested changes to open the door for US allies to participate more fully.
Wi Sung-lac, the national security adviser to Lee, recognized the existing legal constraints. He noted that they are trying to enhance cooperation while considering several alternative routes and institutional reforms.