Administrator Seok Jong-geon of the Defense Acquisition Program Administration (DAPA) said on the 17th that China's sanctions targeting Hanwha Ocean's U.S. subsidiary could eventually affect the "MASGA (Make American Shipbuilding Great Again)" project, if not immediately.
Administrator Seok answered this way when Rep. Yoo Yong-won of the People Power Party asked during the National Defense Committee's audit of DAPA at the National Assembly that there is an estimate that China's sanctions could cause losses of up to $60 million, more than 85 billion won for Hanwha, within the next one to two years. Earlier, China's Ministry of Commerce said it would ban organizations and individuals in China from transaction and cooperative activities with five companies, including Philadelphia Hanwha Philly Shipyard and Hanwha Shipping LLC.
Administrator Seok said, "As contracts related to MASGA have not yet been concluded, I believe there will be no immediate impact," but added, "Considering issues such as various equipment and materials, there will clearly be an impact." Because it is difficult for the Philly Shipyard to produce equipment for building warships within the United States on its own, quantities must be sent from Korea to the United States, which is interpreted to mean there could be sanctions related to this.
Administrator Seok also said, when Rep. Yoo urged speeding up the Republic of Korea–United States Reciprocal Defense Procurement Agreement (RDP-A) so that Korean warships and aircraft can be recognized as "allied-produced" and participate in U.S. government procurement programs, "The RDP-A is awaiting approval from the White House National Security Council (NSC), and for MASGA to go well, the RDP-A must be a prerequisite. We are fully conveying our intent."
Under the Byrnes-Tollefson Amendment, the United States can build warships only at shipyards located in the United States and owned by the United States. If the RDP-A is concluded, Korean warships and aircraft would also be recognized as allied-produced, allowing Korea to participate in U.S. government procurement programs. However, the negotiations are reportedly in a stalemate for the second year.