US Navy’s $1.85B Move: Building Warships in South Korea and Japan?

Translation result.

Washington — Byung‑gi Min, special correspondent, and Ji‑young Choi

The Trump administration has indicated it could, in the short term and while working to rebuild U.S. shipbuilding capacity, source major warship components from South Korea or Japan. Under current U.S. law (commonly referenced as the Jones Act), ships engaged in U.S. trade are required to be built in American shipyards; constructing vessels abroad would require an exemption. Administration officials say allied builders could shoulder part of the work until domestic capacity is expanded. The proposal could broaden the scope for foreign cooperation on naval construction, though it still faces a potential fight in Congress.

On June 1, Breaking Defense quoted an Office of Management and Budget (OMB) official saying, “No one spends 1.85 billion USD (approximately 2.47 trillion KRW) on research. These funds are for procurement.” The official added that, for a frigate, depending on the builder, that sum could buy an entire ship. The remark referred to Navy R&D and procurement funding the Defense Department included in its 2027 budget request to Congress. One option under discussion would see hulls, machinery and electrical structures for up to two warships produced in South Korea or Japan, while U.S. defense firms lead combat‑system integration. The official said talks have involved South Korean builders such as HD Hyundai, Hanwha and Samsung Heavy Industries, and Japanese firms including Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Japan Marine United (JMU).

The OMB official emphasized that any overseas production would be temporary and that foreign shipbuilders would need to invest in U.S. yards. Deliveries to the U.S. could take place while the parent companies of those shipbuilders make capital investments in the American shipbuilding sector, the official said.

In February, the White House’s America’s Maritime Action Plan said the administration would continue historic cooperation with South Korea and Japan to revive U.S. shipbuilding. The plan outlined a “bridge strategy” under which foreign shipbuilders would invest in U.S. yards—through acquisitions or partnerships—so initial contract volumes could be built in their home countries until domestic production ramps up. The approach could encounter congressional opposition: at a Senate Armed Services Committee hearing on May 19, senators from both parties raised objections to plans for building U.S. Navy ships in South Korea and Japan.

South Korea’s shipbuilding industry responded positively. “With the Korea‑U.S. shipbuilding cooperation project MASGA gaining momentum since last year, the administration’s willingness to allocate funds for warship construction represents an opportunity for us,” a South Korean shipbuilding official said.

■ Glossary

◇ Jones Act=The common name for Section 27 of the U.S. Merchant Marine Act. It requires that vessels transporting passengers and cargo between U.S. ports be built in the United States and be owned and operated by U.S. citizens. Enacted in 1920, the law was intended to strengthen naval preparedness and protect the domestic shipbuilding industry.