Recently, the shipbuilding sector has witnessed notable developments across the Atlantic, driven by President Trump’s long-term ambitions to revive US shipbuilding industry. Washington successfully leveraged diplomatic negotiations and looming tariffs to secure significant agreements with Japan and South Korea, two shipbuilding powerhouses that together account for approximately 40% of the global market. These moves align with the U.S. President’s intention to rebuild domestic shipbuilding infrastructure, fortify critical supply chains, and diminish strategic dependence on foreign powers, particularly China.
This strategy came into focus with two agreements. Following intense negotiations, the U.S. finalized a trade deal with South Korea in late July, lowering proposed tariffs in exchange for a staggering $350 billion investment commitment, of which $150 billion is earmarked specifically for U.S. shipbuilding. This was immediately preceded by an agreement with Japan, which saw Tokyo pledge a $550 billion package to modernize and build U.S. shipyards, a direct result of tariffs being cut from 25% to 15%. While the figures are striking, it remains to be seen under which terms and over what timeframe these investments from the Far East will materialize in practice. The above agreements build on existing cooperation. In June 2025, South Korea’s HD Hyundai and Louisiana-based Edison Chouest Offshore (ECO) signed a strategic partnership to build mid-sized, LNG dual-fuel container vessels in the United States. HD Hyundai will provide design support and technology transfer, while ECO will handle construction at its U.S. shipyards. The partnership aims to deliver the first vessels by 2028, aligning with Jones Act compliance and strengthening U.S.- Korea industrial cooperation.
A standout milestone came from Hanwha Ocean, which, via its U.S. affiliate Hanwha Philly Shipyard, secured a contract to build the first export-bound LNG carrier at a U.S. yard in nearly 50 years. Valued at about $250 million, the construction of the 174,000 cbm vessel will follow a hybrid model: major components fabricated at Hanwha’s Geoje yard in Korea, with final outfitting in the U.S. Notably, it will be Jones Act–compliant, meeting the new 2029 requirement for all LNG shipments between U.S. ports to use American-flagged vessels. Hanwha Philly has received another substantial order as well, by Matson Inc, a Hawaibased American liner company, to build three containerships of 3,600 TEU each, with delivery slated for 2026-2027. On the broad picture, the orderbook of U.S. shipyards is a small fraction of the global total, counting 50 units, mainly smaller vessels or those from more niche sectors, while ordering parties are mostly U.S. entities.
However, the revival of the US shipbuilding conceals challenges as well. A labor shortage in U.S. shipyards remains a recognized barrier to any rapid expansion, requiring sustained efforts in workforce development. Furthermore, a significant cost differential, where building a ship in the U.S. can be considerably more expensive than in South Korea or China, poses a major hurdle for long-term cost-competitiveness without continued policy support. Beyond the commercial aspect, these partnerships also serve as a strategic tool to embed U.S. infrastructure within a secure allied network, reducing strategic vulnerabilities. By securing capital and know-how, it's laying the foundation for more US built vessels and high-quality repair services, while directly enhancing issues of national security.
In conclusion, by pairing tariff leverage with geopolitical strategy, the United States has secured not just capital inflows but also a pathway to rebuild domestic know-how and embed world-class shipbuilding capabilities at home. Whether this will position the U.S. as a meaningful commercial shipbuilding player remains uncertain, but the aim is clear: reduce strategic vulnerabilities, prepare for a future in which maritime infrastructure is a central geopolitical asset, and strengthen U.S.-flagged fleets to address both commercial needs and national security issues. These developments highlight the efforts of the U.S. administration to revitalize its shipbuilding industry, potentially paving the way for a future meaningful North American presence in a market dominated by the Far East.
Data Source: Intermodal