South Korea-US shipbuilding cooperation advances amid tariff talks

South Korea’s government and shipbuilding firms are finalizing plans to help revive the U.S. shipbuilding industry as a central issue in the final phase of South Korea-U.S. tariff talks. The plan includes significant Korean investment and technology transfer to the struggling American sector in return for favorable tariff conditions.

This cooperation tackles a key weakness for the U.S. amid ongoing competition with China. Strengthening shipbuilding ties could prove decisive in changing the course of the negotiations.

The government is working closely with major shipbuilders HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries to develop this cooperation plan. Options include expanding investments in U.S. shipyards already owned by Korean firms or acquiring new facilities. This strategy directly responds to U.S. President Donald Trump’s demand to reduce tariffs, including the proposed 25 percent mutual tariffs and the existing 25 percent duties on automobiles and parts.

Trump first raised the idea of shipbuilding ties. After last November’s election, he told then-President Yoon Suk-yeol during a congratulatory phone call that South Korea’s support was vital to reviving U.S. shipbuilding. China’s naval fleet is expected to exceed 400 vessels soon, while the U.S. Navy has fewer than 300. Over the next decade, more than 200 military and commercial ships will be needed, but the U.S. can build only about seven vessels a year. Without South Korea, the world’s second-largest shipbuilder, this challenge cannot be met.

Korean shipbuilders have moved quickly. Last week, HD Hyundai signed a memorandum of understanding with Edison Chouest Offshore, which operates 18 U.S. shipyards, to build container ships. Hanwha Ocean’s Philadelphia shipyard, acquired last year, recently won an order for an LNG carrier, the first such contract awarded to a U.S. shipyard in 46 years.

However, full cooperation requires more than private-sector efforts. For Korean companies to manage maintenance, repair, and overhaul of U.S. military vessels and eventually build warships, a strong security partnership and trust between the two governments are essential. Government-backed financing to support large-scale U.S. investments will be critical. Officials are also considering linking defense budget increases to shipbuilding investment. The South Korean government must take bolder steps to ensure cooperation benefits both countries strategically and economically.