To counter China's dominance in the global shipbuilding market, the US government seeks to revitalize its domestic shipbuilding industry in collaboration with Japan and South Korea, leveraging their investments to restart long-dormant shipyards.

Revitalizing the American shipbuilding industry! US Navy Secretary: Japan and South Korea are "great allies and partners"

According to Bloomberg, US Navy Secretary Carlos Del Toro recently stated that the US needs to increase funding through Congress and overseas investment to revive its domestic shipbuilding industry. He believes that Japan and South Korea are ideal partners and plans to call for their investment in the US shipbuilding industry, particularly in small and medium-sized shipyards, during his visit.

Toro views this issue as one of economic security in competition with China. He noted that China has built a massive commercial shipbuilding industry over the past 40 years, while the US lost its commercial shipbuilding capacity from around the 1980s.

Toro's statement echoes the views expressed in the Pentagon's first "Defense Industrial Strategy" released earlier this year. This document presents nearly 50 pages of recommendations calling for a "fully capable 21st-century" defense department. The strategy states that the US still manufactures the best weapons in the world, but that's not enough in an increasingly competitive world.

The document points out that the US "must be able to rapidly and massively produce these capabilities to maximize our advantages." This advantage may be shrinking, partly due to the US's main competitors. The document states that over the past 30 years, China "has become a global industrial powerhouse in many key areas, from shipbuilding to critical minerals to microelectronics," surpassing the US and its allies in Asia and Europe in some cases.

       In Toro's view, Japan and South Korea are the pathways to expanding shipbuilding capacity, acting as "great allies and partners" in revitalizing the US shipbuilding industry.

Toro recently visited Japan and South Korea, hoping to attract investment in US commercial and naval shipbuilding facilities. This visit is part of Toro's "maritime statecraft" initiative proposed last September, aiming to restore the US's position as a comprehensive maritime power to counter China's aggressive pursuit of global shipbuilding dominance.

Last September, Toro stated in a speech that in the face of intensifying strategic competition, the US needs a new "maritime statecraft," encompassing not only naval diplomacy but also comprehensive efforts by the entire US government and allies to build commercial and naval maritime forces. He stated that the time is ripe for the US maritime industry to partner with more shipyards, both domestically and in close allies like Japan and South Korea.

According to the US Naval Institute, China currently holds nearly 50% of the global shipbuilding market, with South Korea and Japan ranking second and third with approximately 30% and 17% market share respectively. US capacity accounts for only 0.13% of the global market.

The decline in capacity has led to delays and cost overruns in several key US weapons programs, including the construction of aircraft carriers and submarines. Toro declined to name any companies, but he criticized contractors who delayed deliveries or exceeded budgets.

Visiting two major South Korean shipbuilding giants in one day, encouraging investment in restarting idle US shipyards.

During his visit to South Korea, Toro visited two major shipbuilding giants, HD Hyundai Group (formerly Hyundai Heavy Industries Group) and Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering), touring warship and merchant ship construction sites with top executives and discussing future MRO (maintenance, repair, and operations) projects for US Navy vessels in Korea.

On the same day, Toro also visited Hanwha Ocean's Okpo shipyard in Geoje City, met with Hanwha Ocean President Kwon Hyuk-seung, toured the warship construction site, and discussed cooperation plans for US Navy MRO projects.

After listening to a briefing on the construction of South Korea's most advanced submarine, the "Jangbogo-III," Toro also toured Hanwha Ocean's large-scale production equipment, including its digital production center and sea trial center, which combine IoT and cutting-edge digital technologies with shipbuilding.

Toro acknowledged Hanwha Ocean and HD Hyundai's status as global industry standard-setters and highlighted the potential for redeveloping dormant US shipyards into dual-use construction facilities, aiding the transition from fossil fuels to green energy. He also emphasized the economic benefits of revitalizing the US shipbuilding industry, noting that it would create high-paying jobs and build advanced ships crucial to the future economy.

Toro stated: "Beyond our currently active shipyards, there are many former shipyard sites across the country that remain largely intact and are currently dormant. The time is ripe to redevelop these locations into dual-use construction facilities, capable of building both warships and high-value-chain merchant ships such as ammonia carriers, facilitating the global transition from fossil fuels to green energy sources like hydrogen."

It is worth mentioning that South Korean media reported last year that Hanwha Ocean plans to acquire the major US commercial shipyard Philly Shipyard to expand its local business. If successful, the Philly shipyard would be the first US shipyard acquired by a South Korean company.