With the agreement on trade negotiations between Korea and the United States, $350 billion (approximately 488 trillion won) that Korea has decided to invest in the U.S. will include $150 billion (approximately 209 trillion won) set up as a shipbuilding cooperation fund. The two countries are expected to expand shipbuilding cooperation, with local ship construction by Korean shipbuilders in the U.S. and maintenance, repair, and overhaul (MRO) projects anticipated to commence in earnest.
Deputy Prime Minister and Minister of Economy and Finance 구윤철 noted at a briefing at the Korean Embassy in Washington, D.C., after the Korea-U.S. tariff agreement on the 31st, "The most noteworthy aspect of today's agreement is the $150 billion Korea-U.S. shipbuilding cooperation package, the so-called MASGA (Make American Shipbuilding Great Again) project. I believe the biggest contribution to reach this agreement is the MASGA project."
MASGA is a project proposed by our government to contribute to the construction and modernization of shipyards in the U.S. by borrowing the political slogan of Donald Trump, 'Make America Great Again.'
Deputy Prime Minister 구 also stated that the MASGA project will be led by Korea. He said, "This will encompass new shipyard construction in the U.S., training of shipbuilding personnel, reconstruction of shipbuilding-related supply chains, maintenance, repair, and overhaul (MRO), essentially proceeding as our business based on our corporations' needs in the entire shipbuilding sector." He also mentioned that President Trump requested that the project be advanced so that ship construction in the U.S. can take place as quickly as possible.
Kim Yong-beom, the policy chief at the presidential office, also said at a briefing after the announcement of the Korea-U.S. trade agreement on the 31st, "The shipbuilding cooperation fund will cover the entire shipbuilding ecosystem including ship construction, MRO, and equipment, and it will be invested in specific projects based on our corporations' needs." The goal is to combine the world-class design and construction competitiveness of Korean shipbuilding companies with the software strengths of U.S. companies to create synergies in future areas such as autonomous vessels.
Shipbuilding is a core industry of the manufacturing revival goal pursued by the Trump administration. The Trump administration has been promoting the reconstruction of the U.S. shipbuilding base by leveraging alliances with Korea, Japan, and others to prevent China from gaining maritime hegemony. President Trump signed an executive order in April containing plans for shipbuilding reconstruction, alliance cooperation in the shipbuilding sector, and strengthening supply chains.
Korea-U.S. shipbuilding cooperation is expected to take place on a broader scale than U.S.-Japan shipbuilding cooperation. Japan has announced that it will invest part of the $550 billion (approximately 766 trillion won) fund established from the tariff agreement with the U.S. into the construction of shipyards and modernization of facilities, ahead of Korea. However, the Japanese government has yet to present specific shipbuilding cooperation plans with the U.S. The shipbuilding industry anticipates that cooperation will be conducted at a higher level due to Korea's technological superiority in shipbuilding.
The $150 billion fund for Korea-U.S. shipbuilding cooperation is expected to be used for Korea's entry into the U.S. market and training of personnel in the U.S. Not only large shipbuilders but also small and medium-sized corporations are expected to participate in building a new shipbuilding ecosystem in the U.S. Kim stated during a briefing, "Corporations related to shipbuilding actively presented ideas during practical consultations."
Hanwha Ocean and HD Hyundai's affiliated shipbuilders are already participating in the U.S. ship construction and MRO market. Hanwha Ocean plans to jointly construct a liquefied natural gas (LNG) carrier with the U.S. Philadelphia Shipyard (Hanwha Philly Shipyard), acquired at the end of last year.
Hanwha Ocean is pursuing participation in MRO projects in the U.S. after winning contracts for MRO for U.S. Navy vessels in Korea. On the 28th, Kim Dong-kwan, Vice Chairman of Hanwha Group, visited the U.S. to support the government's negotiations with the U.S. as shipbuilding became a key card in the tariff negotiations.
HD Hyundai has also commenced a joint ship construction project in the U.S. in collaboration with an American shipbuilder. Recently, HD Hyundai has agreed to jointly construct medium-sized container carriers at ECO's American shipyard by 2028, in partnership with Edison Chouest Offshore.
The shipbuilding industry is also expecting that domestic companies will have the opportunity to jointly construct U.S. warships in the long term. Currently, the U.S. prohibits outsourcing warship construction to foreign entities, leading to discussions that domestic shipbuilders may participate in U.S. Navy ship construction by manufacturing blocks (assembly components).