South Korea's leading shipbuilders might discover fresh prospects in the U.S. as Washington seeks to rebuild its naval strength.
On April 9, U.S. President Donald Trump issued an executive order entitled "Restoring America’s Maritime Dominance," positioning the resurgence of American shipbuilding as a critical component of national security. This directive encompasses extensive actions targeted at curbing activities within China’s maritime, logistical, and shipbuilding industries. Simultaneously, it promotes international investments and partnerships with friendly nations, particularly singling out South Korea—a recent designation from Trump as a pivotal ally. However, this strategy brings about potential benefits along with significant hurdles for Korean shipyards, as the United States aims to lessen dependence on rival entities via collaborative efforts among partners.
At the signing event in the Oval Office, Trump stated, "We will be investing heavily in ship construction," further noting, "We are significantly behind schedule. In the past, we could construct a ship daily, but currently, we barely manage to complete one annually despite our capability to do more."
The executive order was initiated by National Security Advisor Mike Waltz, who has long championed the rejuvenation of U.S. shipbuilding capabilities. While serving as a congressman, he proposed bipartisan bills focused on enhancing shipyards and ports' infrastructures. A representative from the White House emphasized, "Restoring our maritime supremacy hinges upon constructing additional vessels and growing the merchant marine that backs naval missions." Under President Trump’s administration, the National Security Council (NSC) set up a specialized department aimed at advancing this endeavor.
The executive directive mandates the U.S. Trade Representative (USTR) to investigate China’s biased focus on the maritime, logistics, and shipbuilding industries. Additionally, it calls for the USTR to collaborate with allied nations, partners, and similarly inclined countries regarding possible trade actions, suggesting that this might involve pressuring even those considered close friends. The USTR has previously announced intentions to levy charges on global shipping services connected to both Chinese-flagged vessels and domestically produced craft from China.
This directive also mandates decreasing reliance on adversarial entities by collaborating with allies and partners. It instructs the Secretary of Commerce to suggest motivations for shipbuilders located in friendly countries to make investments within the United States, thereby enhancing America’s capability in constructing ships.
As Trump aims to revitalize America’s shipbuilding sector, South Korea and Japan emerge as the primary potential partners. Notably, South Korea stands out due to its global leadership in shipbuilding technology. During previous conversations with former President Yoon Suk-yeol last year and again on April 8 with Acting President and Prime Minister Han Duck-soo, Trump highlighted the possibility of collaboration in this area.
In the previous year, Hanwha Group made history as the inaugural South Korean corporation to penetrate the American shipbuilding sector through the acquisition of Philly Shipyard. Following this development, there has been increasing support from both sides of the political aisle for collaborations involving South Korean entities such as HD Hyundai. Additionally, cooperation with United States businesses aiming to enhance cutting-edge ship construction utilizing artificial intelligence and autonomous systems is rapidly gaining momentum.