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Policy framework with U.S. Navy crucial for bilateral shipbuilding cooperation

Published: 20 Oct. 2025, 18:51 Updated: 21 Oct. 2025, 22:13

LEE JAE-LIM
[email protected]

Officials and representatives from Korean defense authorities, shipbuilders and researchers attend the International Conference of Naval Vessel and Unmanned System Technology, hosted by the Defense Acquisition Program Administration at Goyang, Gyeonggi, on Oct. 20. [LEE JAE-LIM]

A multitiered joint framework involving Korean shipbuilders, defense authorities and the U.S. Navy is essential to driving the bilateral shipbuilding cooperation tied to Washington’s proposed $150 billion investment in the U.S. maritime sector, according to Korean experts.

“Goal alignment is key to achieving shared objectives,” said Kwon Nam-yeon, associate research fellow at the Korea Institute for Defense Analyses (KIDA), speaking Monday at the International Conference on Naval Vessel and Unmanned System Technology hosted by the Defense Acquisition Program Administration (DAPA) in Goyang, Gyeonggi.

“Korea should adopt a strategic stance by creating both high-level and working-level consultative bodies. The high-level council would shape perception, coordinate policies and drive legal reforms, while a joint defense task force — comprising representatives from Korean shipbuilders, the Ministry of National Defense and DAPA — would ensure coherent coordination with the U.S. Navy. This would help overcome the current fragmentation between Korea’s acquisition and operational functions.”

However, the initiative, intended to counter China’s dominance in global shipbuilding, has been stymied by protectionist regulations safeguarding U.S. industry.

While the Trump administration and the U.S. Navy have signaled strong interest in working with Korea, the recently passed National Defense Authorization Act for fiscal year 2026 continues to prohibit the use of U.S. shipbuilding funds overseas.

“The U.S. views Korea as a key maritime partner, but remains cautious due to Seoul’s geographic proximity to China,” said Kwon.
“From an industrial standpoint, there are also concerns that partnering with foreign shipyards could undermine U.S. domestic competitiveness over time,” she added. “Shipbuilding is labor-intensive and closely linked to jobs and political constituencies, making major policy shifts politically sensitive.”

A central obstacle to foreign participation remains the Byrnes-Coleman Amendment, the “Buy American” clause that bars not only foreign construction of U.S. naval vessels, but also the manufacture of major ship components abroad. The law effectively blocks coproduction models envisioned by Korean researchers as a pathway for collaboration.

In response, Korea’s two major shipbuilders have pursued divergent strategies. Hanwha Ocean last year acquired Philly Shipyard in the U.S. — now operating as Hanwha Philly Shipyard — and is exploring an expanded North American presence through a larger stake in Austal, the Australian defense contractor in which it already holds 9.9 percent. HD Hyundai, by contrast, has opted for a gradual partnership approach, teaming with U.S. firms such as Huntington Ingalls Industries, Fairbanks Morse Defense, Edison Chouest Offshore and Anduril Industries to jointly develop technologies, integrate into U.S. supply chains and eventually coproduce both commercial and military vessels.

Given the regulatory and institutional barriers, Kwon stressed that a multilevel cooperative architecture is needed to align defense, industrial, economic and diplomatic priorities.

Echoing her remarks, Jonathan Caverley, visiting senior fellow at the International Institute for Strategic Studies-Americas, underscored the importance of building long-term trust over symbolic agreements.

“There’s too much emphasis in Korea on signing the next memorandum to move up the ladder toward the U.S.,” he said. “What truly matters is sustained cooperation, trust and creating tangible results on the ground — that’s far more meaningful.”

BY LEE JAE-LIM [[email protected]]