Why America Needs South Korea to Rebuild Its Shipbuilding Industry — Inside the $150 Billion MASGA Bet

 

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The United States operates the most powerful navy in the world.

Yet when it comes to building commercial ships, the country that dominates global military power has become a remarkably small player.

That contradiction is becoming increasingly difficult for Washington to ignore.

In January 2025, the Office of the United States Trade Representative noted that the United States ranked only 19th globally in commercial shipbuilding and built fewer than five commercial ships per year, while China was building more than 1,700.

The contrast with America's past is striking. In 1975, the United States ranked first and was building more than 70 commercial ships annually.

Today, rebuilding shipbuilding capacity is no longer simply an industrial-policy objective.

It has become an economic-security and national-security issue.

And that helps explain why South Korea — home to one of the world's most sophisticated shipbuilding ecosystems — has suddenly become central to America's maritime strategy.

At the heart of the emerging partnership is a massive initiative commonly known as MASGA — “Make American Shipbuilding Great Again.”

South Korea's broader U.S. strategic investment framework includes $150 billion specifically allocated for shipbuilding cooperation.

But the most important question is not how much money will be invested.

It is this:

Can the United States rebuild an industrial ecosystem that took South Korea decades to create?

The answer could reshape not only the global shipbuilding industry, but also the economic architecture of the U.S.–South Korea alliance.

Key Numbers Behind the U.S.–Korea Shipbuilding Partnership

Indicator	Figure
South Korea's planned U.S. shipbuilding cooperation	$150 billion
Broader Korean strategic U.S. investment framework	$350 billion
Hanwha's planned investment in Philly Shipyard	$5 billion
Philly Shipyard current/previous annual output	Less than 2 vessels
Hanwha's long-term Philly capacity target	Up to 20 vessels per year
U.S. commercial ships built annually, according to USTR in 2025	Fewer than 5
Chinese ships built annually cited by USTR	More than 1,700
China's global shipbuilding share in 2023	Over 50% of global tonnage
U.S. position in commercial shipbuilding cited by USTR	19th globally

These numbers reveal the scale of the challenge.

The United States is not attempting to expand an already competitive shipbuilding industry.

It is trying to reconstruct industrial capacity after decades of decline.

Why U.S. Shipbuilding Fell Behind

America was once one of the world's great shipbuilding powers.

During the twentieth century, U.S. shipyards were capable of producing commercial and military vessels at enormous scale.

But the global industry gradually shifted toward Asia.

Japan became a major shipbuilding power after World War II. South Korea emerged as a global leader from the 1970s onward. China then expanded at extraordinary speed during the twenty-first century.

Meanwhile, much of the remaining U.S. shipbuilding industrial base became concentrated around military vessels and protected domestic markets.

The problem is that shipbuilding competitiveness depends heavily on scale.

A shipyard does not become globally competitive simply because it owns a large dry dock.

Modern shipbuilding requires an entire ecosystem:

• skilled welders, engineers and designers;
• specialized steel and components;
• propulsion and electrical systems;
• large supplier networks;
• sophisticated logistics;
• standardized production processes;
• digital engineering;
• block construction;
• automation;
• experienced project management;
• and, perhaps most importantly, a continuous flow of orders.

Once this ecosystem shrinks, rebuilding it becomes extremely difficult.

The U.S. government itself increasingly recognizes the problem.

In April 2025, the White House issued an executive order aimed at restoring American maritime dominance and ordered the development of a Maritime Action Plan.

The administration also directed federal agencies to examine ways of expanding America's maritime industrial base.

The policy message was clear:

Shipbuilding had become strategic infrastructure.

China Changed the Equation

The urgency becomes easier to understand when China enters the picture.

China's rise in shipbuilding has been extraordinary.

According to the Congressional Research Service, China's share of global shipbuilding grew from less than 5% of global tonnage in 1999 to more than 50% in 2023.

That transformation matters because commercial and military shipbuilding are not completely separate industrial worlds.

They share suppliers, engineers, skilled workers, steel fabrication capabilities, docks and manufacturing knowledge.

A massive commercial shipbuilding industry therefore creates industrial depth.

And industrial depth can become strategically important during periods of geopolitical competition.

The United States Trade Representative concluded in its Section 301 investigation that China's policies targeting maritime, logistics and shipbuilding sectors had created economic-security risks and supply-chain vulnerabilities for the United States.

There is another reason Washington is concerned.

Maritime transportation remains the backbone of global trade.

USTR notes that more than 80% of global goods trade by volume moves by sea. Ships also carry a large share of U.S. international trade with Asia and Europe.

The shipbuilding issue is therefore bigger than ships themselves.

It touches energy security, military logistics, global supply chains and America's ability to sustain maritime power during a prolonged crisis.

Why South Korea Is Different

If America needs a shipbuilding partner, several countries theoretically could help.

But South Korea occupies a particularly valuable position.

Korean shipbuilders have decades of experience producing some of the world's most technologically complex commercial vessels, including LNG carriers, container ships, tankers and offshore platforms.

The country's major shipbuilders also possess substantial naval capabilities.

Companies such as Hanwha Ocean and HD Hyundai Heavy Industries have experience building sophisticated warships and submarines in addition to commercial vessels.

More importantly, Korea's advantage is not simply cheaper labor.

That distinction matters.

The modern Korean shipbuilding model increasingly relies on:

automation, modular construction, digital ship design, integrated supply chains, production optimization and smart-yard technologies.

In other words, Korea possesses something America cannot simply purchase by ordering a few cranes.

It possesses accumulated manufacturing knowledge.

That knowledge may be the most valuable component of MASGA.

What Exactly Is MASGA?

MASGA is commonly described as a $150 billion South Korea–U.S. shipbuilding cooperation initiative.

It sits within a broader Korean strategic investment framework in the United States.

In March 2026, South Korea's National Assembly approved legislation supporting a $350 billion U.S. strategic investment framework, including $200 billion for strategic industries and $150 billion associated with shipbuilding cooperation.

The legislation created institutional mechanisms for managing these investments.

That development matters because MASGA is moving beyond political rhetoric.

The infrastructure required to implement cooperation is beginning to appear.

On July 23, 2026, South Korea's Ministry of Trade, Industry and Resources and the U.S. Department of Commerce formally launched the Korea–U.S. Shipbuilding Partnership Center in Washington, D.C.

The center follows the Korea–U.S. Shipbuilding Partnership Initiative established earlier in 2026.

Its mission includes areas such as:

shipyard productivity, workforce development, technology cooperation, joint research and development, supply chains and modernization.

That suggests the partnership is evolving from a financial commitment into an industrial strategy.

Hanwha Philly Shipyard: The Real-World Test

The most important experiment may already be underway in Philadelphia.

Hanwha acquired Philly Shipyard through an approximately $100 million investment and subsequently announced a far more ambitious expansion.

In August 2025, Hanwha announced a $5 billion infrastructure plan for the shipyard.

The plan includes additional docks and quays, potential block-assembly facilities and advanced manufacturing infrastructure.

The long-term goal is remarkable.

Hanwha says it intends to increase annual production capacity from less than two vessels to as many as 20 vessels per year.

That would represent far more than an ordinary shipyard expansion.

It would effectively test whether Korean shipbuilding methods can be reproduced inside the United States.

Hanwha has also discussed producing LNG carriers, naval modules and blocks and, eventually, naval vessels at its American facilities.

This makes Philadelphia one of the most important industrial laboratories in the U.S.–Korea economic relationship.

If the shipyard succeeds, Washington will have evidence that foreign industrial expertise can accelerate American reindustrialization.

If it struggles, the difficulties could reveal how hard it is to transplant a manufacturing ecosystem across borders.

Smart Yards and Korean Technology

This is where the MASGA story becomes more interesting than the headline investment number.

Consider what would happen if the United States simply spent billions of dollars constructing new shipyards.

It would have docks.

It would have cranes.

It would have buildings.

But would it automatically have Korean-level productivity?

Probably not.

A modern shipyard functions more like an enormous manufacturing network than a simple construction site.

Thousands of components must arrive in precise sequences.

Hull blocks weighing hundreds or thousands of tons must be fabricated, transported and assembled.

Piping, electrical systems and machinery must be integrated into increasingly complex vessels.

Errors at one stage can delay the entire production schedule.

Korean shipbuilders have spent decades optimizing these processes.

Digital twins, automated welding, robotic systems, AI-assisted production planning and integrated supply-chain management increasingly form part of the competitive equation.

This is why technology transfer and operational know-how may ultimately matter more than the headline investment figure.

The real question is whether Korean companies can reproduce these systems under American labor conditions, regulations, supplier structures and construction costs.

U.S. Navy MRO May Be the Bridge

There is another important part of the partnership: maintenance, repair and overhaul — MRO.

In March 2025, the U.S. Navy announced that the USNS Wally Schirra had completed a seven-month regular overhaul at Hanwha Ocean's shipyard in South Korea.

The project involved dry docking and more than 300 work items, including hull corrosion repairs and a full rudder replacement.

The U.S. Navy described the project as a landmark achievement in the bilateral partnership.

This may provide a practical pathway for deeper cooperation.

Building frontline U.S. warships in foreign shipyards remains legally difficult.

Under 10 U.S.C. § 8679, vessels for the U.S. armed forces generally cannot be constructed in foreign shipyards, although a presidential national-security waiver mechanism exists.

That means the most realistic near-term expansion of Korean participation may occur through several stages:

MRO → logistics and auxiliary vessels → naval modules and components → U.S.-based construction using Korean technology → potentially deeper naval cooperation if U.S. law and policy evolve.

Hanwha's ownership of an American shipyard is particularly significant because it offers another route.

Instead of building American ships in Korea, Korean manufacturing expertise can increasingly be deployed inside the United States.

What South Korea Gets in Return

It would be misleading to describe MASGA as South Korea simply helping America.

Korea also has major strategic incentives.

The first is access to the enormous U.S. maritime market.

Korean shipbuilders already compete globally in commercial shipping, but deeper U.S. localization could create new opportunities in American commercial vessels, LNG carriers, government fleets, naval support vessels and eventually defense shipbuilding.

Second, American expansion provides geographical diversification.

Korean shipbuilding capacity is overwhelmingly concentrated in South Korea.

Operating major production facilities in the United States gives Korean companies a manufacturing base inside one of the world's largest defense and energy markets.

Third, cooperation could strengthen Korea's position in the global naval industry.

South Korea is already becoming a serious exporter of defense equipment.

If Korean shipbuilders establish a successful record supporting U.S. maritime requirements, that credibility could influence competitions elsewhere.

Finally, the partnership changes Korea's strategic value to Washington.

Semiconductors, batteries and automobiles already connect the two economies.

Shipbuilding could add another industry that is difficult to replace.

That matters in an era when alliances are increasingly defined not only by military treaties, but also by control over critical industrial capacity.

The Risks Nobody Should Ignore

The opportunity is enormous.

So are the risks.

1. American Production Costs

Ships built in the United States can be substantially more expensive than comparable vessels produced in Asia.

Technology can reduce the gap, but automation alone cannot eliminate differences in wages, regulation, procurement and supplier costs.

2. Skilled Labor

Shipbuilding requires experienced welders, pipefitters, electricians, naval architects, engineers and production managers.

A modern shipyard can purchase equipment quickly.

Building a skilled workforce can take years.

3. Supplier Networks

Korea's shipyards benefit from dense clusters of specialized suppliers.

Reproducing those networks in America could prove harder than expanding physical shipyard capacity.

Importing too many Korean components, however, could conflict with the political objective of rebuilding a genuinely American industrial base.

4. Regulatory Barriers

U.S. maritime and defense procurement laws impose significant restrictions on foreign construction and sourcing.

These rules reflect legitimate national-security and domestic-industrial concerns, but they can also complicate cooperation.

5. Political Risk

A $150 billion framework will unfold over many years.

Administrations change.

Trade policies change.

Tariffs change.

Industrial priorities change.

Long-term shipbuilding investments therefore require political durability beyond a single presidency.

6. Technology Transfer

Korean companies must also protect their own interests.

Their production systems, ship designs, engineering capabilities and manufacturing know-how represent decades of investment.

Transferring too much technology without securing long-term market access could eventually create new competitors.

Can MASGA Actually Work?

The answer depends on how success is defined.

If success means restoring U.S. commercial shipbuilding to Korean or Chinese scale within a few years, expectations are unrealistic.

Industrial ecosystems cannot be recreated overnight.

But if MASGA is treated as a 10- to 20-year industrial reconstruction project, the calculation changes.

The United States possesses enormous advantages:

capital, advanced technology, defense demand, energy resources, universities, a huge domestic market and the world's largest military budget.

What it lacks is the dense modern shipbuilding ecosystem that Asian competitors developed over decades.

South Korea can potentially shorten that learning curve.

The most effective model therefore may not be simple outsourcing.

It may be industrial transplantation.

American workers.

American shipyards.

American demand.

Korean production systems.

Korean engineering experience.

Korean smart-yard technology.

And gradually, a reconstructed American supplier ecosystem.

That would represent something far more significant than buying ships from an ally.

It would represent an attempt to transfer manufacturing capability itself.

ANDYLISM Insight

The $150 billion headline makes MASGA look primarily like an investment story.

It is not.

MASGA is fundamentally an experiment in industrial transplantation.

South Korea is not merely bringing money to American shipyards. What matters is whether it can help transfer an entire manufacturing system — engineering knowledge, supplier coordination, workforce training, automation, production management and decades of accumulated shipbuilding experience.

That distinction explains why Hanwha Philly Shipyard may become far more important than its current production numbers suggest.

If Hanwha can transform a relatively small American yard into a digitally enabled facility capable of producing vessels at dramatically higher volumes, it would provide a blueprint for broader U.S. maritime reindustrialization.

But there is an important warning.

Factories can be built faster than industrial ecosystems.

A $5 billion shipyard expansion can purchase docks, cranes and automated equipment.

Money cannot instantly produce thousands of experienced welders.

It cannot immediately recreate Korea's supplier clusters.

It cannot reproduce decades of engineering knowledge overnight.

And it cannot automatically guarantee the productivity that makes Korean shipyards globally competitive.

That leads to the central conclusion:

MASGA is not simply South Korea investing in American shipyards. It is a test of whether an advanced manufacturing capability built in Asia can be transplanted into the United States without losing the productivity, supplier networks and skilled workforce that made it competitive in the first place.

For the United States, success could restore a strategic industrial capability that has eroded for decades.

For South Korea, success could produce something equally important.

Korean shipbuilders could evolve from globally competitive exporters into deeply embedded partners in America's maritime industrial base — spanning commercial ships, LNG carriers, naval MRO, shipyard technology and potentially future naval construction.

That would fundamentally change the role of Korean shipbuilding.

The industry would no longer simply be selling ships to the world.

It would be exporting the capability to build them.

And in an era when industrial capacity is once again becoming a measure of national power, that may ultimately be far more valuable.

Sources and Further Reading

South Korea Ministry of Trade, Industry and Resources — “Korea–U.S. Shipbuilding Partnership Center Launches to Drive MASGA Forward,” July 27, 2026.

Reuters — “South Korean parliament approves $350 bln US investment bill,” March 12, 2026.

Hanwha Group — “Hanwha announces $5 billion Philly Shipyard investment as part of South Korea’s commitment to US shipbuilding growth,” August 27, 2025.

United States Trade Representative — “USTR Finds That China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance Is Actionable Under Section 301,” January 20, 2025.

Congressional Research Service — “Section 301 and China: Shipping and Shipbuilding Issues.”

The White House — “President Donald J. Trump Restores America’s Maritime Dominance,” April 9, 2025.

United States Navy — “USNS Wally Schirra Completes Major Maintenance at South Korean Shipyard,” March 13, 2025.

U.S. Code, Title 10 §8679 — Construction of vessels in foreign shipyards: prohibition.

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