President Donald Trump wants more ships made in America. He’s going to need foreign help.
Key to this effort, which the administration sees as a national security and economic imperative, is South Korean shipbuilding giant Hanwha Ocean, which acquired the Philly Shipyard in Pennsylvania last year.
It's the linchpin of a broader strategy to counter China’s dominance in the field, which gives the People’s Republic a significant military and economic advantage over the U.S., whose shipbuilding capabilities are anemic in comparison. And shipbuilding could play a critical role in trade negotiations between the Republic of Korea and the United States.
“Everybody knows that U.S. shipbuilding has diminished significantly over the last couple of decades,” said a senior administration official granted anonymity to discuss the administration’s thinking. “We welcome their know-how, their capital and the general collaboration.”
Trump, during a speech to celebrate the Navy’s 250th birthday in Norfolk, Virginia, touted the new investments from overseas, saying America will “soon revitalize our once great shipyards with hundreds of billions of dollars in new investments and people coming from all around the world, and they're gonna build ships in America.”
Trump arrives in South Korea this week, his third stop on a weeklong Asia trip, where he is expected to meet newly elected President Lee Jae Myung, deliver a speech to business leaders and attend a dinner with other heads of state. The visit comes amid broader tensions between South Korea and the United States over a $350 billion investment that Seoul has pledged, which included $150 billion for shipbuilding cooperation.
The Trump administration wants that money to be a direct investment from the Korean government, while South Korea wants it to come from private companies — like Hanwha. South Korea’s annual gross domestic product is only $1.7 trillion, and some officials worry a direct investment would cause a financial crisis.
But that investment could further anger China, which currently controls roughly 71 percent of global ocean-going shipmaking. Tensions remain high after China sanctioned five of Hanwha’s U.S. subsidiariesearlier this month.
Treasury Secretary Scott Bessent on Monday said an agreement with South Korea is unlikely to be finalized ahead of Trump’s arrival, as the two governments continue to iron out details of the initial agreement on tariff rates they reached in July.
While the exact mix of public, private and sovereign investment remains under negotiation, Hanwha has announced roughly $5 billion in initial funds.
Shipbuilding offers the South Koreans a way to curry favor with Trump and show they are spending serious sums to boost American commercial might and revitalize once-thriving industries. They’ve dubbed their campaign “Make American Shipbuilding Great Again” and arrived at the White House this summer with MAGA-style red caps.
“There needs to be a recognition of all that South Korea is already doing, including in the shipbuilding sector,” said a person familiar with U.S.-South Korean investment talks granted anonymity due to the sensitivity of those discussions.
And partnering in this way with the United States could in turn help buoy South Korean shipbuilding interests, which are second in the world behind China and gaining.
Representatives from Hanwha along with other major South Korean businesses were at Mar-a-Lago this month to speak with Trump about their planned investments in America as trade negotiations, which could ultimately determine tariff rates, come to a head between the two countries.
“The goal is knowledge and technology transfer,” Hanwha Chief Strategy Officer Alex Wong, who until the summer served as Trump’s deputy national security adviser, told POLITICO. “That’s how you catch up on decades of lost expertise.”
Trump appears on board with the idea, telling reporters Monday aboard Air Force One that his administration is crafting “a whole new” visa plan to accommodate South Korean and other foreign manufacturing experts.
Trump observed that some factories make “very complex, very highly sophisticated equipment” that Americans will need to be trained to use. “They’ve gotta bring people in with them for a period of time, and they’ll teach our people how to do it. But even for a fairly long period of time, they’re gonna need expertise to be successful,” Trump said.
In August, Hanwha executives and Lee toured the Philly Shipyard and announced orders for 12 new ships. The South Korean president said at the ceremony that shipbuilding would represent “growth, opportunity, dreams and hope” for young Americans.
Beyond drastically expanding U.S. shipbuilding capacity — from the current two ships per year to as many as 20, including liquefied natural gas carriers — Hanwha aims to train American workers in advanced Korean shipbuilding technologies like automated welding, artificial intelligence-driven inventory systems and digitalized assembly.
“Our ally South Korea is the No. 2 shipbuilder, and with investments like Hanwha is making to grow its shipyard and modernize it with bigger workforce, you'll start to see the return on that investment as more orders are put in for American sourced ships,” Heritage Foundation senior research fellow Brent Sadler said.
Beijing’s mammoth Jiangnan Shipyard produces more vessels annually than all U.S. shipyards combined. The administration is counting on the investment to help revitalize a U.S. industry that has fallen far below world standards, which puts the United States at disadvantage relative to a chief economic and military rival.
Sadler said recent events such as “the Suez Canal blockage that shut down global supply chains for about a week; the invasion of Ukraine and the shutdown of grain shipment; Beijing’s Covid zero policies and the world's largest container port shuts down for a day … have made a very compelling case that shipping is a national security item, and we don't have it.”
That industrial dominance translates into military leverage. In a crisis, whether a conflict over Taiwan or a blockade through chokepoints like the Malacca Strait or Bab el-Mandeb, the United States could find itself struggling to transport goods or project naval power.
“We’ve lost the commercial foundation that underpins maritime power,” said a former NSC official, granted anonymity to speak candidly. “You can’t regenerate or repair your fleet without that base.”
To rebuild that base, the U.S. is turning to its Indo-Pacific allies, especially South Korea. In addition to Hanwha, HD Hyundai Heavy Industries is reportedly in talks to buy a U.S. shipyard. The company in August launched a new entity called Cerberus Maritime with Cerberus Capital Management, whose former CEO, Stephen Feinberg, is now deputy defense secretary.
HD Hyundai Heavy Industries and U.S. shipbuilder HII on Sunday signed a pact at the Asia-Pacific Economic Cooperation Forum in South Korea to team up on U.S. Navy auxiliary ships and link the two nations’ supply chains. The two companies agreed in October to pursue a design contract for the U.S. Navy’s next-generation logistic ship, pairing Hyundai’s experience with HII’s designs.
Hanwha and Hyundai are already bidding on and receiving certain contracts traditionally held by Navy shipyards on the West Coast. That could help cut through existing backlogs by enabling regional facilities to refurbish auxiliary and logistics ships closer to deployment zones. In response to this cooperation, China sanctioned Hanwha’s U.S. subsidiaries. “It was a signal by Beijing to third countries: do not work with the U.S. to gang up on us, or else there will be consequences,” said Patricia Kim, a fellow for the Center for East Asia Policy Studies in the Brookings Institution.
After American unions pushed for a U.S. government probe into China’s maritime dominance, the administration announced port fees on Chinese-owned and operated vessels — $50 per ton starting mid-October, rising annually — a move that triggered Chinese retaliation this month with matching fees on U.S. ships.
Congress, meanwhile, is trying to reinforce the shipbuilding effort. Sens. Todd Young (R-Ind.) and Mark Kelly (D-Ariz.) are pushing the "SHIPS for America Act," which would create a Maritime Security Trust to channel those port-fee revenues into U.S. shipyards. Labor groups are pressing lawmakers to act quickly, warning that China’s control of global shipbuilding grows daily. Young, who can sometimes be seen in the Senate sporting the “Make American Shipbuilding Great Again” cap, said in an interview that South Korea is essential for providing capital and expertise to train American workers. However, that collaboration has been complicated by a recent immigration raid at a Hyundai plant in Georgia, which led to the detention of 475 workers, mostly South Korean nationals.
Weeks later, Washington allowed South Korean employees to work on short-term visas or a visa waiver program to help build industrial sites in America. Young said the move lowered the temperature, but the issue remains unresolved.
Another friction point is how much shipbuilding work Washington is comfortable offshoring to South Korea. Young, a booster for American manufacturing, said he is open to limited cooperative manufacturing if it strengthens America and keeps domestic jobs at the forefront. “In order for me to keep this coalition together that I think will be important to pass the 'SHIPS for America Act,' we need to accept that there may be less foreign manufacturing of certain things than that might otherwise make sense, but I’m comfortable with making those principled compromises,” Young said.
“America First does not mean America alone,” he said. “So we should continue to rely, to some extent — and that’s where the negotiation will occur — on trusted friends and partners for foreign investment and even for cooperative manufacture and repair of certain things.”
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