President Donald Trump has vowed to lead a revival of America’s shipbuilding industry, but the success of this manufacturing revival in a critical area of national security will depend on foreign expertise.
The administration’s goal of a shipbuilding boom is part of President Trump’s “Make America Great” policy agenda. President Trump signed an executive order in April to strengthen the shipbuilding industry, but many industry executives warn that it won’t be easy given the current state of the domestic industry and that foreign investment and cooperation will be key. The Trump administration’s “Make America’s Shipyards Great Again” initiative considers building liquefied natural gas tankers, polar icebreakers and naval vessels.
“The American shipbuilding industry has experienced two booms in the last 110 years,” Peter Sand, chief shipping analyst at Zeneta, told CNBC. “The first boom was during World War I and the second was during World War II,” he said.
China dominates the global commercial shipbuilding industry, with approximately 232 times the shipbuilding capacity of the United States. There are currently eight shipyards operating in the United States. There are over 300 in China.
The Trump administration’s shipbuilding plan is an extension of investigations into Chinese shipbuilding by the U.S. Trade Representative’s office under the Biden and Trump administrations. The USTR 301 investigation found that the Chinese government has strengthened its shipbuilding industry’s dominance by using massive subsidies and designating the industry as a strategic industry. The study said these acts, policies, and practices are “unreasonable and burden or restrict U.S. commerce.”
The United States recently began imposing fees on Chinese-built ships calling at U.S. ports, leading to retaliatory measures from China, but the two countries agreed to a one-year suspension as part of a trade ceasefire in November.
In 2008, China surpassed Japan in shipbuilding production. In 2010, China overtook South Korea to become the world’s largest shipyard in terms of both production capacity and new orders. Since then, China’s lead has continued to grow. The global market share in shipbuilding reached 53%, followed by South Korea and Japan.
According to data shared by Sandoz, in the 2025 newbuilding order book, China will account for 75% of orders, followed by South Korea with 19% and the US with 0.2%.
“If you look at the orders, it’s going to be hard to make American shipbuilding great again. We need to bring in foreign expertise,” Sand said.
Major foreign companies involved in U.S. shipbuilding
To boost domestic shipbuilding and training of American workers, the Trump administration has signed contracts with foreign shipbuilding companies.
Three shipbuilding companies of the Hanwha Group, the world’s third largest shipbuilding company based in South Korea, are playing important roles in this plan.
During trade negotiations in July, South Korea and the United States announced a $350 billion investment agreement, of which $150 billion would be earmarked for maritime investments. The overall trade deal was finalized in November, with U.S. auto tariffs on imports from South Korea reduced from 25% to 15%.
“Why reinvent the wheel? There are good reasons why bad guys and allies work together to leverage corporate expertise and experience,” Sand said.
South Korea began increasing its presence in the U.S. maritime industry in 2024 with the acquisition of Philadelphia’s Philly Shipyard from Norwegian industrial investment group Aker ASA for $100 million. The shipyard was later renamed Hanwha Philadelphia Shipyard.
Ship construction at Hanwha Philadelphia Shipyard
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In August, Hanwha Group announced a $5 billion infrastructure plan, part of a $150 billion investment to accelerate the site’s operations, so that Hanwha Philadelphia Shipyard’s shipbuilding capacity can expand from 1 to 1.5 ships a year to eventually 20 ships a year.
Hanwha Philadelphia Shipyard received its first order for a U.S.-built, export-ready LNG carrier from Hanwha Shipping, the shipping division of Hanwha Group, in July. This is the first order in approximately 50 years. A second order for an LNG carrier was placed in August. Delivery is scheduled for around 2028 and is being made possible through a co-construction model with South Korea’s Hanwha Ocean Geoje Shipyard. The lack of shipbuilding capacity and personnel at Philadelphia shipyards necessitates a co-construction model.
Hanwha Ocean manufactures 50 to 60 ships a year.
“One of the challenges facing the industry is workforce,” said David Kim, CEO of Hanwha Philadelphia Shipyard.
According to Kim, the biggest bottleneck in employee training is the lack of American instructors. To remedy this, Hanwha plans to rotate U.S. employees from Philadelphia to yards in South Korea to train workers. “That’s our biggest advantage,” Kim said. “The best people we want to train America’s workforce are the people who work in the garden,” he added.
The company is also considering expanding its training programs.
“We have 1,700 employees to date,” Kim said. “Given our goal of delivering 20 ships a year, our staff will be close to 10,000 in the future,” he added.
Creation of demand for oil, LNG, and US cargo ships
Hanwha’s order for LNG carriers is not the only order it has placed with the Philadelphia shipyard. Hanwha Shipping also ordered 10 medium-range tankers used to transport oil and chemicals, the largest U.S. commercial vessel order in more than 20 years. The first ship is scheduled to be launched in 2029.
“Currently, there are 55 Jones Act oil tankers in the world and 7,500 oil tankers worldwide,” said Andy Lipow, president of Lipow Oil Associates.
The Jones Act requires that vessels transporting goods between U.S. ports be built, owned, crewed, and flagged in the United States.
“When it comes to LNG, the U.S. shipbuilding industry is not participating by any stretch of the imagination,” Lipow said. There are about 750 LNG tankers in the world, but only one is U.S.-flagged and “was built in France,” he said.
However, the shortage of U.S.-made tankers has not affected U.S. LNG exports or crude oil growth.
“The U.S. LNG market is not at a disadvantage. We currently export nearly 30% of our crude oil production and have no trouble finding tankers,” Lipow said.
nuclear maritime ambitions
During President Trump’s recent trip to Asia, he announced that Hanwha would build its first nuclear-powered submarine at a shipyard in Philadelphia. Hanwha manufactures large naval submarines in South Korea.
“The United States needs its own ability to build ships and submarines for its national security and resilience,” said Alex Wong, Hanwha Group’s global chief strategy officer. “In times of war, we need the ability to regenerate and create naval ships, and that’s unacceptable,” Wong said. “By doing so, we can not only win wars, but also prevent wars.”
In August, President Trump ordered the movement of two nuclear submarines in response to the threat from Russia.
The timing of the submarine’s construction at Hanwha Philadelphia Shipyard is subject to ongoing discussions between the South Korean and U.S. governments.
“What is also important for the times is the availability of technology and resources,” Kim said.
The U.S. Navy continues to build its technological infrastructure. with the navy Palantir Technologies It recently announced ShipOS, a software that helps build and maintain U.S. submarines. In the future, this software could also be used on aircraft carriers and jet aircraft.
Italian shipyards with ties to Wisconsin also play a role.
In addition to South Korea, companies from Finland and Italy are also being used to expand the US shipbuilding industry. Italian Prime Minister Giorgia Meloni reaffirmed her country’s commitment to U.S. shipbuilding in a joint statement with President Trump during their April meeting.
The leading Italian company in this effort is Fincantieri Marinette Marine (FMM). The company was founded in Wisconsin in 1942 as Marinette Marine to build warships for World War II and was later acquired by an Italian company. President Trump toured the company’s Wisconsin shipyard during his first term.
The company recently laid off 93 employees, about a week after the Navy canceled an order for four frigates that were to be built in Wisconsin. Instead of building six buildings, the company will now build two.
Welders work on ship components at Fincantieri Shipyard in Green Bay, Wisconsin.
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In addition to naval vessels, Fincantieri also manufactures other commercial ships such as LNG and cruise ships. Wisconsin shipyards are considered to be among the most modern and advanced shipyards.
“There are a lot of people here who touch boats,” said George Moutafis, CEO of Fincantieri Marine Group. “All of our almost 3,000 employees participate in a collaborative effort across three yards.”
A network of suppliers of ship parts and materials increases overall employment related to shipbuilding.
“We have about 800 suppliers in 40 states, 300 of which are here in Wisconsin and Michigan,” Moutafis said. “So shipbuilding requires villages and things like that,” he added.
Competition for control of the Arctic
The United States is also lagging behind in the race to build polar icebreakers. The U.S. Coast Guard has three icebreakers. Russia has the world’s largest polar fleet, with 57 icebreakers and ice-capable patrol vessels as of 2022 data. China has five icebreakers.
One of the U.S. ships, the Polar Star, is rated as a heavy icebreaker and is deployed to Antarctica. The ship is 49 years old. Two medium-sized icebreakers, USCGC Healy (25 years old) and USCGC Storis (built in 2012, acquired and modified by USCG in 2024), are rated as medium-sized icebreakers and are used on the Northern Passage.
The US government’s expansion into the Arctic is related to defense considerations. The Northern Sea Route follows Russia’s Arctic coast, and the Northwest Passage across Canada’s Arctic Islands shaves weeks off travel time between North America and Europe. If a ship did not use this polar route, it would have to circumnavigate North America and pass through the Panama Canal or Suez Canal.
In the future, the Transpolar Sea Route, a central sea route across the central Arctic, offers the shortest distance, but requires large icebreakers and is largely covered in ice. To close the gap in polar icebreaker production, the United States is turning to Finland, known as a leader in polar icebreaker manufacturing and design.
The United States and Finland signed a memorandum of understanding on icebreaker construction at the White House on October 9th. The $6.1 billion agreement included the acquisition of 11 new icebreakers for the U.S. Coast Guard. Under the contract, Finnish shipyards Helsinki Shipyards (owned by Canadian-based Davie Defense) and Rauma Marine Constructions will build four Arctic patrol cutters, while the U.S. shipyard will build an additional seven. The first icebreaker is scheduled to be delivered in 2028.
In November, a joint statement of intent was announced between the United States, Canada, and Finland to advance shipbuilding and Arctic defense cooperation under the Icebreaker Coordination Effort (ICE) agreement. It was first announced in July 2024 at the NATO summit in Washington, DC, by President Biden, then-Canadian Prime Minister Justin Trudeau, and Finnish President Alexander Stubb.
In early December, Davie’s purchase of Gulf Copper & Manufacturing Corporation’s shipbuilding assets in Port Arthur and Galveston, Texas, was approved by the Committee on Foreign Investment in the United States, which reviews foreign acquisitions on national security grounds.
