Hanwha’s Philly Shipyard could play a pivioal role in the rebirth of U.S. shipbuilding in coming years. File Photo by Michael Reynolds/EPA
When U.S. Navy Secretary John C. Phelan and former White House Budget Director Russell Vought visited Hanwha’s Philly Shipyard on July 30, it was more than a symbolic gesture.
Their inspection, which included a meeting with Korean welding trainees and close observation of automated welding systems from Hanwha’s Geoje yard, reflected a dramatic shift underway in the U.S.-Korea alliance — from military defense to industrial partnership.
The following day, former President Donald Trump announced that Washington and Seoul had reached a landmark agreement on tariffs. At its center lies the MASGA Project– short for “Make America’s Shipyards Great Again” — a $150 billion South Korean initiative embedded in a broader $350 billion investment fund to help revive America’s floundering shipbuilding industry.
The scale of the challenge is breathtaking. In 2024, U.S. shipyards delivered only seven vessels, amounting to just 0.1% of global market share. Meanwhile, China controls nearly half of global shipbuilding. Rebuilding this capacity has become not only an economic priority, but also a national security imperative.
For Washington, Korea — the world’s second-largest shipbuilding power — is the only credible partner to make that possible.
Hanwha Vice Chairman Kim Dong-kwan outlined Seoul’s strategy to the U.S. delegation: use the Philly Shipyard as a springboard to build new U.S. yards, train workers, restore supply chains and handle vessel maintenance and overhaul.
If executed as envisioned, this collaboration could transform bilateral ties. As political scientist Dr. Lee Choon-Kun notes, “If the U.S. Navy becomes dependent on ships built or maintained in Korea, it won’t just be an ally defending Korea — it will be defending its own strategic assets on Korean soil.”
In Seoul, the response has been swift. The ruling party introduced a “MASGA Support Act” aimed at removing legal and regulatory obstacles to shipbuilding cooperation.
Plans are underway to acquire mid-sized Korean shipbuilders for modular construction and MRO services exclusively for U.S. Navy use. Some sites may even be designated as “defense industry districts” that meet U.S. security standards, with the possibility of giving the U.S. Navy operational control — mirroring arrangements at Camp Humphreys.
Korea would provide labor and technical capability, while the United States would provide capital and strategic requirements.
MASGA is only one front in this new alliance. Another is semiconductors. On July 28, Tesla CEO Elon Musk announced a $16.5 billion agreement with Samsung Electronics to manufacture next-generation AI6 chips at a new foundry under construction in Taylor, Texas.
These ultra-high-performance chips — designed for autonomous vehicles, humanoid robots and AI data centers — will begin production late next year using Samsung’s 2-nanometer process.
Musk cited multiple reasons for the deal: improved yield rates, competitive pricing, geographic proximity and a desire to diversify away from Taiwanese chipmaker TSMC.
Musk is so enthusiastic that he has even suggested establishing a personal office inside Samsung’s Texas facility to monitor progress — underscoring how closely intertwined the U.S. and Korean tech sectors have become.
In addition, the Korea Trade Insurance Corp. has issued a $1 billion guarantee to LG Chem for its $2 billion cathode materials plant under construction in Clarksville, Tenn. — part of the $200 billion investment fund agreed upon during the tariff deal.
Once operational, the plant will supply enough cathode material annually to power 600,000 electric vehicles. Cathodes account for roughly 40% of a battery’s cost, making the project critical for EV strategy and industrial supply chains.
Yet, these grand plans face real-world challenges — foremost among them, a shortage of skilled labor. South Korea’s shipbuilding sector reported a 14.7% vacancy rate in the first half of 2024 — nearly twice the national average.
The younger generation is increasingly turning away from shipbuilding due to wage stagnation, unstable job prospects, and grueling conditions. Technical schools have shuttered or shifted focus. Even the “Big Three” shipbuilders-Hyundai, Daewoo, and Samsung-struggle to recruit trainees for their internal academies.
If this labor crisis is not addressed soon, Korea may fall short of its MASGA commitments, undermining both its credibility and the alliance’s momentum. A coordinated national strategy to rebuild the shipbuilding workforce is urgently needed.
Another concern is the pending “Yellow Envelope Bill,” a proposed labor law that would expand subcontractor unions’ bargaining rights. While supporters view it as a step toward fairness, major industry leaders warn it could destabilize core industries vital to U.S.-Korea cooperation.
Federation of Korean Industries Chairman Sohn Kyung-shik has cautioned that hundreds of subcontractor unions could simultaneously demand negotiations in fields like shipbuilding and semiconductors — leading to logistical chaos and investor pullback.
If the bill proceeds, it would be prudent to exempt key strategic sectors, including those targeted by the recent trade deal: shipbuilding, semiconductors, nuclear energy, batteries and biotech.
The U.S.-Korea alliance is no longer defined solely by military bases and defense treaties. It is being redefined in factories, shipyards, and fabrication labs. But whether this transformation succeeds depends in large part on the choices made in Seoul.
The Lee Jae Myung administration now stands at a pivotal juncture. If it rises above ideological distractions and prioritizes strategic execution, Korea could seize a once-in-a-generation opportunity. If not, it risks allowing a historic industrial and geopolitical realignment to slip through its fingers.
Nohsok Choi is the former chief editor of the Kyunghyang Shinmun and former Paris correspondent. He currently serves as president of the Kyunghyang Shinmun Alumni Association, president of the Korean Media & Culture Forum and CEO of the YouTube channel One World TV.
