Trump wants to ‘make America shipbuilding great again,’ and he’s turning to an ally for help
Last year China booked 74% of the world’s new orders for commercial ships, compared with 0.2% for the United States, according to shipping data consulting firm Veson Nautical. China’s closest competitor, South Korea, booked 17%.
According to the U.S. Office of Naval Intelligence, China has 232 times the shipbuilding capacity of the U.S., helped in part by government subsidies.
The U.S. military, which is required by law to build all its ships domestically, is facing its own crisis even as China rapidly builds out its own naval fleet.
“All of our programs are a mess, to be honest,” Navy Secretary John Phelan told lawmakers in June. “We are behind schedule and over budget. I think our best-performing one is six months late and 57% over budget.”
It wasn’t always like this.
The U.S. once dominated global shipbuilding, reaching its peak at the end of World War II before demand declined.
“And then over time, when less expensive foreign competition came along, for example, first from Japan, and then from Korea, and now from China, the U.S. shipbuilding industry was much less competitive in the commercial market,” said Cynthia Cook, a senior fellow in the Defense and Security Department at the Center for Strategic and International Studies in Washington.
Faced with this state of affairs, the U.S. is turning to its allies for help.
“Korea has an incredible shipbuilding industry, which we look forward to partnering with a lot more,” Defense Secretary Pete Hegseth said Tuesday after talks with his South Korean counterpart in Seoul.
South Korea has allocated $150 billion to cooperation with the U.S. on shipbuilding as part of the $350 billion it pledged in U.S. investment in a trade deal that was finalized during Trump’s visit.
South Korean shipbuilder HD Hyundai Heavy Industries said last month it had agreed to jointly build U.S. Navy auxiliary ships with U.S. military shipbuilder Huntington Ingalls.
The U.S. and Japan also signed an agreement during Trump’s trip on expanding shipbuilding capacity in both nations.
Cook, who has visited South Korean shipyards including the one in Geoje, said they might turn out one commercial ship a week, which “creates an industrial base that supports the ability to invest in innovation.”
“If you’re building two ships in a year, like a U.S. naval shipyard might be, you just don’t have the same kind of demand signal to your supply base that would get them to invest in their own technologies to support you, because it’s just not worth it,” she said.
At the Hanwha shipyard, the USNS Charles Drew was perched on blocks after being hauled out of the water.
It is getting a new paint job, repairs to its propellers and rudder, and updates to other systems in a scheduled overhaul that is set to last about five months.
Beeler confirmed the importance of strengthening the U.S. shipbuilding industry.
“There’s just not enough yards that can hold ships this large and do work on them,” he said.
S.K. Song, a project manager for Hanwha, said the U.S. Navy job was hopefully a “stepping stone” to building commercial and eventually military ships in the U.S., where his company paid $100 million last year for the Philly Shipyard outside Philadelphia.
“If the USA gives us the opportunity, we’re willing to work with the USA,” he said.
“We are already ready,” Song said, citing artificial intelligence and robotic equipment as among the “many kinds of elements we want to incorporate to the U.S.”
The White House said last Wednesday that Hanwha would invest $5 billion to expand and modernize the Philly Shipyard, providing advanced South Korean technology and sending skilled workers there to train Americans — an issue that has become fraught after hundreds of South Korean workers were detained in an immigration raid in Georgia in September.
Trump also said he had given South Korea approval to build a nuclear-powered submarine, which would make it one of only a handful of nations to possess one. He said it would be built in the Philly Shipyard.
Cook said the U.S. was right to try to revive its shipbuilding industry, and that “anything is possible with the right kind of investment.”
“We can build up U.S. shipbuilding,” she said. “The question is, how much will it cost, and how do we make the commercial shipbuilding competitive on the world market?”
Cook said it would be “a lot more cost-effective” to help U.S. allies such as South Korea remain competitive against China.
“If we’re not building ships,” she said, “our friends better be.”
Janis Mackey Frayer and Stella Kim reported from Geoje, South Korea, Adam Reiss from Philadelphia and Jennifer Jett from Hong Kong.
