Posted on April 21, 2025
As it faces the possibility of a 25 percent tariff on its exports, South Korea has taken notice of President Trump’s stated goal to revive U.S. shipbuilding.
As South Korea prepares for trade talks with the United States next week, it thinks it has a way to appeal directly to President Trump: through its thriving shipbuilding industry.
A longstanding American ally, South Korea is also the world’s second-largest shipbuilder after China. This prowess, officials from Seoul will argue, can help Mr. Trump with his goal of reviving America’s maritime industry. In exchange, they hope to mitigate the punishing 25 percent tariff Mr. Trump plans to impose on South Korean exports like Hyundai and Kia cars, steel and aluminum, and LG dishwashers.
Both sides have said that Mr. Trump wants shipbuilding to be part of a new trade deal between the two countries. A new agreement is also likely to include large purchases of American liquefied natural gas by South Korea to help lower its trade surplus with the United States.
But “since President Trump and his administration have expressed big interest in cooperation in shipbuilding, it will become a very important negotiating card for us,” South Korea’s trade and industry minister, Ahn Duk-geun, told Parliament last week.
Ahn Duk-geun, South Korea’s trade and industry minister, in Seoul last month.
South Korea’s finance minister, Choi Sang-mok, has said he hopes to meet with Treasury Secretary Scott Bessent in Washington next week. Like many smaller nations, South Korea has not pushed back at Mr. Trump with its own retaliatory duties. Unlike China and Europe, it has instead sought talks with Mr. Trump.
“It is a wiser solution to elevate the South Korea-U.S. alliance to a stronger security and economic alliance,” said South Korea’s acting president, Han Duck-soo.
More than a decade ago, China dislodged South Korea as the world’s biggest commercial shipbuilder. Beijing also has more warships than the United States and is expanding its naval fleet at a speed that American shipyards cannot match.
“South Korea and Japan are virtually the only U.S. allies with a large shipbuilding industrial base,” said Choi Il, a retired South Korean Navy captain. “The United States wants to make use of that infrastructure.”
China makes 74 percent of the world’s commercial ships, while the United States builds only one-fifth of 1 percent, according to the White House. China has also built the vast majority of containers moving commodities around the world, and most ship-to-shore cranes in U.S. ports were made in China.
The U.S. Office of Naval Intelligence projected the Chinese Navy to have 395 battle force ships by 2025, compared with 287 for the U.S. Navy. For years, U.S. shipyards have been unable to deliver Navy warships on time and budget.
In an address to Congress last month, Mr. Trump vowed to “resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding.” He has also established a new Office of Shipbuilding at his National Security Council.
In an executive order last week, Mr. Trump called for increasing the number of U.S.-flagged vessels in international trade and promised incentives for shipbuilders from American allies to invest in the United States. Washington has also proposed to charge million-dollar U.S. port docking fees on Chinese-built or Chinese-flagged vessels and use the proceeds to invest in American shipbuilding.
If these steps discourage shipping lines from buying more vessels from China, they could help South Korean shipbuilders. Mr. Trump has also said that the United States may buy ships from allies.
The Pentagon began wooing shipbuilders in South Korea and Japan even before Mr. Trump’s election.
In February 2024, the U.S. Navy secretary then, Carlos Del Toro, visited South Korean shipyards to “give them a very simple message: Invest in America and not only invest in America financially but invest in the American alliance,” said Steve Brock, a former senior adviser to the secretary.
South Korean firms responded.
Last June, Hanwha Ocean announced a $100 million deal for the commercial Philly Shipyard in South Philadelphia. The company planned to expand its capabilities and hoped to win U.S. Navy orders, too. Last year, Hanwha also became the first South Korean shipyard in South Korea to overhaul a U.S. Navy supply ship.
A U.S. Navy ship receiving an overhaul at a Hanwha shipyard in 2024, in a photo released by the company.
Another Korean firm, HD Hyundai Heavy Industries, the world’s largest shipbuilding company, is exploring a partnership with Huntington Ingalls Industries, the largest military shipbuilder in the United States. Both companies build advanced Aegis class destroyers for their respective countries.
Hyundai has also announced a partnership with the U.S. defense contractor Anduril Industries to build maritime drones.
But some analysts questioned how deeply the allies could cooperate. A shortage of skilled workers and commercial shipbuilding orders, as well as the many regulatory and political barriers against foreign companies seeking entry into the U.S. defense industry, would make South Korean investments risky, they said. Mr. Trump’s own heavy import taxes, including on steel and other materials used in shipbuilding, will result in U.S.-made ships being even less competitive in global markets.
Analysts also questioned Mr. Trump’s commitment to reviving American shipbuilding, warning that a single executive order alone could not reverse a decades-old decline in the industry.
Yoon Suk-joon, a senior fellow at the Korea Institute for Military Affairs, said, “Shipbuilding is just another sector where Trump is twisting an ally’s arm.”
