SUMMIT US to buy Korean ships as Korean firms rebuild its yards

HD Hyundai Executive Vice Chairman Chung Ki-sun, second from right, poses with Cerberus Capital CEO Frank Bruno, center, and Korea Development Bank Chief Operating Officer Kim Bock-kyu, second from left, after signing a memorandum of understanding at the Willard InterContinental Washington, Monday (local time). Industry Minister Kim Jung-kwan, left, and U.S. Commerce Secretary Howard Lutnick also attended the ceremony. Courtesy of HD Hyundai

An initiative to revitalize shipyards in the United States with investments from Korea is on track, as the two countries' leaders reaffirmed cooperation in the shipbuilding sector during their first summit at the White House in Washington, Monday (local time).

Aligned with the government-level talks, Korea's leading shipbuilders also announced U.S. expansion, declaring the launch of the so-called "Make American Shipbuilding Great Again" (MASGA) project, agreed upon last month during Korea-U.S. tariff talks. Touted as the key contributor to the deal, the project aims to rebuild U.S. shipyards with $150 billion in investments from Korea.

U.S. President Donald Trump opened his remarks for the summit by addressing shipbuilding, and said the U.S. will buy ships from Korea and have Korean companies build ships in U.S. territory using American labor.

"We are thinking about contracting some ships," he said. "They build them very well in South Korea. They're also thinking about coming to our country with some shipyards to start on the process of building ships again."

Trump has frequently expressed his willingness to cooperate with Korean shipbuilders and those of other allied nations to rebuild U.S. shipyards and counter China's maritime ambitions. However, the Jones Act and other U.S. regulations on the construction and use of foreign ships have been stumbling blocks to this plan. The act requires vessels that engage in transportation within the U.S. to be built in the country, as well as primarily crewed and owned by U.S. citizens.

Trump's comments during the summit have been interpreted as an indication of his administration's intent to ease those regulations.

"Although there was no immediate announcement of large-scale orders or investments at the summit, it proved that the strategic role of Korean shipbuilders will become significant, given that it is difficult to rebuild U.S. shipbuilding in a short period of time," Shinyoung Securities analyst Eom Kyung-ah said.

President Lee Jae Myung supported Trump's position, presenting him with a miniature Turtle Ship made by an HD Hyundai Heavy Industries engineer to showcase Korea's shipbuilding history. Designed by Adm. Yi Sun-sin during the Joseon Dynasty, the warship was used against Japanese naval forces during Toyotomi Hideyoshi's attempts to conquer Korea from 1592 to 1598.

"There is a renaissance taking place not only in the shipbuilding sector but also in the manufacturing industry," Lee said at the summit. "I hope that Korea can be a part of that renaissance."

The summit was followed by the Korea-U.S. Business Roundtable, where Lee stressed Korea's status as the best partner for the U.S. to revive its manufacturing industry.

"For the U.S. to regain its shipbuilding industry's glory and strengthen military power, Korea will push for the MASGA project," he said. "Having the world's top three shipyards, Korean companies will play key roles in rebuilding the U.S. shipbuilding with their extensive portfolios, ranging from commercial vessels to liquefied natural gas ships and icebreakers."

A miniature Turtle Ship that President Lee Jae Myung gave to U.S. President Donald Trump as a gift to commemorate their summit at the White House in Washington, Monday (local time) / Courtesy of the presidential office

Top 3 shipbuilders ready for US expansion

HD Hyundai signed a memorandum of understanding with Korea Development Bank and Ceberus Capital at the event, promising to create a multibillion-dollar joint investment fund — a milestone in the MASGA project.

In collaboration with the Korean state-run lender and the U.S. private equity firm, the shipbuilding giant will serve as an anchor investor and technical partner to help ensure the effective management of the program, which aims for the acquisition and modernization of U.S. shipyards, capital investment in equipment and component suppliers, and the development of advanced shipbuilding technologies.

"We believe that our partnership with Cerberus Capital will not only provide tangible support for MASGA, but also create new markets and growth opportunities for Korean shipbuilders," HD Hyundai Executive Vice Chairman Chung Ki-sun said.

Samsung Heavy Industries CEO Choi Sung-an, second from left, poses with Vigor Marine Group CEO Francesco Valente, after signing a memorandum of understanding at the Willard InterContinental Washington, Monday (local time). From left are Industry Minister Kim Jung-kwan, Choi, Valente and U.S. Commerce Secretary Howard Lutnick. Courtesy of Samsung Heavy Industries

Samsung Heavy Industries joined with Vigor Marine Group, a ship repair company running drydocks in Oregon, Washington, California and Virginia. Through the partnership, the Korean firm aims to participate in maintenance, repair and overhaul of U.S. Navy ships, as well as joint construction of vessels in U.S. shipyards.

Although Hanwha Ocean did not sign an agreement at the event, a document from the White House showed the company has already announced a $70 million investment to expand Philly Shipyard in Philadelphia. Hanwha Group Vice Chairman Kim Dong-kwan also joined Lee's U.S. trip to escort the president during his visit to the shipyard on Tuesday.