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'Make American Shipbuilding Great Again' project touted as key contributor to tariff deal
Donald Trump, second from right, takes a look at Daewoo Shipbuilding & Marine Engineering's shipyard, now operated by Hanwha Ocean, on Geoje Island in South Gyeongsang Province, in this 1998 photo. Courtesy of Hanwha Ocean
By Park Jae-hyuk
Seoul highlights $150 bil. investment in US shipbuilding as Washington remains silent
The government said Thursday its proposal to create a $150 billion fund aimed at revitalizing the American shipbuilding industry played an important role in securing a tariff deal with the United States in Washington on Wednesday (local time), just before the Aug. 1 deadline.
Shortly after meeting U.S. President Donald Trump at the White House to finalize the deal, Deputy Prime Minister and Finance Minister Koo Yun-cheol told reporters in the U.S. capital that the so-called “Make American Shipbuilding Great Again” (MASGA) project was a key contributor.
“Recognizing Korean shipbuilders’ capabilities, Trump also requested immediate construction of new vessels in the U.S.,” Koo said.
The proposed $150 billion investment is part of a $350 billion fund to be invested by Korea in the U.S. in return for reducing “reciprocal” and auto tariffs to 15 percent. Before the deal, Washington had planned to start imposing 25 percent “reciprocal” tariffs on Korean imports on Aug. 1. It had already levied 25 percent item-specific tariffs on Korean cars.
A national security multi-mission vessel is under construction at Hanwha Philly Shipyard in Philadelphia, Pa., July 16. Courtesy of Hanwha Ocean
According to the government, the MASGA project includes construction of new shipyards in the U.S., training American shipyard workers, rebuilding supply chains related to shipbuilding and maintenance, repair and overhaul (MRO) of U.S. vessels.
President Lee Jae Myung wrote on social media that the project will help Korean firms expand their presence in the U.S. shipbuilding market. The finance minister added that Korean shipbuilders will ultimately be the main beneficiaries of the cooperation.
Industry Minister Kim Jung-kwan also told reporters in Washington that the U.S. is likely to ease regulations on foreign investments in its shipbuilding sector, citing the country’s strong intention to cooperate with Korean shipbuilders.
He added that U.S. Commerce Secretary Howard Lutnick praised the Korean negotiators for introducing the MASGA project to satisfy U.S. demand for shipbuilding partnership.
However, further details about the shipbuilding cooperation remain unknown. It is also unclear how Korea will raise the $150 billion.
The U.S. government has not commented on the shipbuilding cooperation.
Saying that Korea will accept American vehicles and agricultural products, Washington only highlighted Seoul’s plan to invest $350 billion in the U.S. and import energy products including liquefied natural gas.
Hanwha, which operates a shipyard in Philadelphia, said it will join the MASGA project for the development of both countries' shipbuilding industries.
"With the expansion of the Philly Shipyard, construction of new shipyards and additional MRO projects, we will lead the revival of the U.S. shipbuilding industry," the conglomerate said in a statement.
HD Hyundai said it will cooperate with the government for the MASGA project, once it is informed of further details.
On behalf of the shipbuilders, the Korea Offshore & Shipbuilding Association issued a statement welcoming the tariff deal.
“The shipbuilding industry is proud of our contribution to the tariff deal,” the association said. “We expect the MASGA project to revive the U.S. shipbuilding industry and help us in finding new opportunities.”
Despite the remaining uncertainty, shares of Hanwha Ocean and HD Hyundai Heavy Industries soared on Thursday due to optimism that the cooperation will help the Korean shipbuilders expand in the U.S. market.
Hanwha Group Vice Chairman Kim Dong-kwan also visited Washington earlier this week to support Korean negotiators, along with other conglomerate leaders including Samsung Electronics Executive Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Chung Euisun.
Trade Minister Yeo Han-koo, who was among the Korean negotiators, declined to comment on the business leaders’ roles, though he thanked them for their support.