Shortly after ending a telephone conversation with South Korea’s interim President Han Duck-soo on April 8th, US President Donald Trump turned to his social media platform, Truth Social, to emphasize "one-stop shopping." He discussed collaboration in the shipbuilding industry, significant purchases of U.S.-made liquefied natural gas (LNG), and shared investments in an Alaska gas pipeline initiative. This approach was considered atypical for Trump, who usually insisted that other nations present their bargaining chips to secure reduced tariffs; this instance saw him presenting various offers instead.
All eyes are now focused on whether South Korea, known for having one of the most competitive shipbuilding sectors globally and being among the top three liquefied natural gas (LNG) importing nations along with China and Japan, might contribute to lowering the current bilateral tariff rate on LNG, which hovers around 25%. On the very same day he arrived in the U.S., Jeong In-kyo, who leads the Office of Trade Negotiations at the Ministry of Trade, Industry and Energy, stated, "Given our strengths in fields like shipbuilding and constructing LNG infrastructure, we intend to introduce these subjects during negotiations."
The sense of urgency seems to be more pronounced on the American side when it comes to shipbuilding. As China enhances its naval power, presenting a significant challenge to the U.S. Navy, the United States urgently requires additional shipbuilding and maintenance assistance and is turning towards South Korea for this purpose. Over the next three decades, the U.S. Navy intends to allocate $1.075 trillion with the aim of acquiring 364 ships. They are also considering changes to legislation from the last sixty years to enable allied nations to construct their warships.
South Korean shipbuilders aim to broaden their footprint in the American market. On April 7, HD Hyundai entered into a pact with Huntington Ingalls Industries—the leading naval yard in the US—to cooperate on enhancing production automation, integrating robotics and AI technologies, as well as developing employee training programs. Following its acquisition of the Philly Shipyard in Philadelphia back in June, Hanwha Ocean intends to secure certification for defense vessel construction by next year and break into the specialized maritime segment within the US. According to someone from the shipbuilding sector: "While China and the USA ranked highest among our exporting countries last year, we shipped very limited numbers of vessels to these nations." They added, "This collaboration might pave the way into the US marketplace."
Nonetheless, the Alaskan LNG project poses additional hurdles. Despite Trump’s frequent emphasis on this initiative and Taiwan’s readiness for significant acquisitions, numerous experts in South Korea feel that their nation might be compelled to favorably consider American requirements. Concurrently, there is an increasing demand to seek tariff cuts as part of negotiations. During his appearance at the National Assembly on April 9th, Trade, Industry, and Energy Minister Ahn Duk-geun stated, "It will be essential to discuss with the United States the commercial feasibility of the LNG project along with potential avenues for collaboration," reflecting a measured stance.
Even though Alaska LNG boasts a brief delivery timeframe of only nine to eleven days, doubts persist regarding the venture’s practicality. Concerns arise about hastily agreeing to substantial liquefied natural gas acquisitions or engaging in the 1,300-kilometer pipeline initiative. South Korea’s state-run gas company, KOGAS, grapples with fiscal pressures, complicating efforts to finance a scheme projected to require $44 billion.