U.S. defense bill tests South Korea shipbuilding partnership
· UPIJuly 2 (Asia Today) -- Competing proposals in the U.S. Congress could determine how extensively South Korean shipbuilders can participate in future U.S. naval construction programs.
The House Armed Services Committee approved a fiscal 2027 defense authorization bill June 5 that includes an amendment introduced by Rep. Jared Golden, D-Maine.
The amendment would prohibit U.S. Navy funding from being used to procure battle force ships and major components built at foreign shipyards.
Federal law already generally prohibits the Navy from obtaining major hull and superstructure components from overseas yards. The amendment would further restrict the remaining exceptions and reinforce the principle that U.S. warships should be built in the United States. (Maritime Strategy Center)
The proposal has raised concerns in South Korea because it could limit plans for Korean shipbuilders to jointly construct U.S. naval vessels.
The Senate Armed Services Committee, however, adopted a different approach in its version of the legislation June 11.
Its proposal would allow the Pentagon to procure up to two bulk fuel vessels and two strategic sealift vessels from foreign shipyards, creating a limited exception for auxiliary vessels built by companies in allied countries.
The House and Senate versions must still pass their respective chambers and be reconciled before the final defense authorization bill can become law.
The outcome is expected to become a major factor in determining the direction of shipbuilding cooperation between South Korea and the United States.
U.S. seeks to protect yards while expanding fleet
The congressional debate reflects competing U.S. priorities.
Washington wants to protect and rebuild its domestic shipbuilding industry, but it also needs additional industrial capacity to expand the Navy and compete with China.
The United States accounted for about 0.1% of global commercial shipbuilding output in 2024, compared with more than 53% for China, according to the Center for Strategic and International Studies.
A U.S. Government Accountability Office review found that 37 of the 45 battle force ships under construction that it examined were experiencing schedule delays. China's overall shipbuilding capacity has also been estimated at more than 200 times that of the United States.
The Trump administration has responded by pursuing a maritime action plan intended to rebuild domestic production while exploring a bridge strategy involving investments and technical support from allied shipbuilders.
South Korean companies have accelerated efforts to establish themselves in the U.S. market.
Hanwha Ocean acquired a shipyard in Philadelphia and announced plans for large-scale investment in its facilities.
HD Hyundai Heavy Industries has expanded cooperation with HII, the largest U.S. military shipbuilder, on auxiliary vessels, commercial ships, artificial intelligence and automated production technology.
Samsung Heavy Industries and South Korean ship design company DSEC are also working with General Dynamics NASSCO on U.S. commercial and naval programs, including the Navy's next-generation logistics ship.
Expectations for broader cooperation increased after President Lee Jae Myung said President Donald Trump asked during their meeting at the Group of Seven summit whether South Korea could rapidly build 10 vessels for the U.S. Navy.
Lee said South Korea was prepared to help. The conversation took place during the leaders' summit in France, rather than during a telephone call as initially described in some reports.
Local U.S. production could become more important
Industry officials said the House proposal would have little direct effect on maintenance, repair and overhaul work because it primarily addresses the construction and procurement of new vessels.
HD Hyundai Heavy Industries said the proposed restriction would not change the legal conditions governing the maintenance projects it is pursuing.
Hanwha Ocean is also expected to face limited immediate effects because it owns Hanwha Philly Shipyard, giving the company a production base inside the United States.
The broader policy direction, however, could require South Korean companies to increase their U.S. manufacturing investments and secure more skilled American workers.
Hanwha's Philadelphia facility may provide it with an advantage if Congress adopts stricter domestic construction requirements. HD Hyundai Heavy Industries and other Korean companies could also expand partnerships, investments or production arrangements with U.S. yards.
"The central issue is not maintenance work but how far the United States will allow allies to participate in the construction of American naval vessels," an industry official said.
"The final legislation could significantly affect Korean companies' U.S. investment strategies and the future direction of South Korea-U.S. shipbuilding cooperation," the official said.
-- Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260702010001006