This project note is based on a closed-door workshop held at the Stimson Center on May 7, which convened a diverse group of industry representatives, experts, and former and current government officials from both the United States and South Korea. The roundtable focused on the strategic, industrial, and policy challenges related to US shipbuilding capacity and explored actionable paths for bilateral cooperation in naval and commercial shipbuilding. The summary distills key insights, proposals, and themes discussed during the roundtable and aims to inform broader policymaking efforts in the evolving domain of maritime statecraft.
The United States today finds itself in an increasingly precarious position when it comes to naval power and maritime industrial capacity. For decades, shipbuilding in the United States has languished. Once a global leader in maritime construction, the United States now produces a mere 0.1 percent of the world’s commercial shipbuilding output. In the meantime, China has invested aggressively in modernizing its naval fleet and expanding its shipbuilding infrastructure, widening a capabilities gap that now threatens to become a strategic liability for Washington.
That gap, according to a growing consensus of U.S. defense and policy experts, cannot be closed with domestic resources alone – at least not within the timeframe often cited by strategists aiming to deter or prevail in a potential future conflict with a near-peer adversary. The structural deficiencies are too great, the industrial base too eroded, and the regulatory landscape too paralyzing. In the view of key stakeholders in Congress and the administration, meaningful remedies lie not only in reinvestment but also in urgent, creative collaboration with trusted allies. Among those allies, South Korea stands out.
South Korea is home to some of the most efficient and technologically advanced shipbuilders in the world. From constructing warships to deploying cutting-edge autonomous platforms, Korean shipyards have repeatedly proven their capacity to deliver at scale and speed. If the United States is to revitalize its naval posture for the 21st century, a fundamental shift in strategic maritime thinking is needed – what one former Secretary of the Navy has aptly termed a “new maritime statecraft.”
This vision is a call to revitalize maritime power as a core component of US national security and global leadership through the strategic integration of naval hardware, defense, diplomacy, commerce, and innovation, anchored in long-term planning and international cooperation. Crucially, new maritime statecraft must anticipate future challenges – industrial competition over ocean resources, contested maritime territories, and the logistical complexities of a high-tech, distributed naval force. The message is clear: the United States must be bold, forward-looking, and cooperative. It cannot tackle these challenges alone. In this regard, leveraging allied industrial capacity – particularly from countries like South Korea – is not merely a stopgap, but a strategic imperative.
There are several challenges that Washington must overcome in order to deliver on these promises. First, it is essential to provide a clear and consistent demand signal for continued investment by allied shipbuilders in the US shipbuilding industry, as exemplified by Hanwha’s acquisition in 2024 of Philly Shipyard. The SHIPS (Shipbuilding and Harbor Infrastructure for Prosperity and Security) for America Act (“the SHIPS Act”) sets a goal to expand the U.S.-flag international fleet by 250 ships over the next decade, its central objective being the revitalization of the U.S. shipbuilding and commercial maritime industries. While a commendable goal, Korean shipbuilders with an orderbook of more than 100 ships will need more ships on order to make sizable capital expenditure and business development profitable. This means strong demand from the US shipping industry at large enough scale would give reason for Korean shipbuilding companies to invest in the United States for greater market access. The SHIPS Act is a step in the right direction, but domestic maritime revitalization will require greater investment and demand.
Some changes to the existing legal and industrial frameworks may be an option to address the deficiencies of the US shipbuilding industry. These include revising the existing statutory rules and regulations regarding ships manufactured overseas and national security-related restrictions on cross-border partnerships, or overcoming the shortage of skilled labor in U.S. shipyards by bringing in skilled workers from countries like South Korea. Tackling these issues through executive orders or legislative reforms could unlock new alternatives, such as joint production with trusted allies and revitalization of US domestic naval shipbuilding.
Second, there are several ways in which the United States can start to rebuild its domestic naval shipbuilding capacity. One is by exchanging best industry practices with trusted allies. Another way is through the expansion of maintenance and repair of existing ships with allied shipbuilders. An additional consideration is through collaborative modular build-out with the cooperation of allied shipbuilding companies. All of this will take time to implement in meaningful ways. Finally, short-term purchases of foreign-built ships may be an option while the United States increases its domestic shipbuilding capabilities.
There appears to be more room for discussion on this second point as there are notable disagreements about the impact of foreign purchases on the domestic naval shipbuilding sector. At the roundtable, for example, some participants argued that allied shipbuilders can deliver vessels faster and in a more cost-effective manner than domestic alternatives. Others pointed out that political barriers to foreign purchases make it difficult to overcome this hurdle, and there is still time to give domestic naval shipbuilding a chance. Some participants also discussed the significant political, legal, strategic, technical security, and business incentive reasons why the United States cannot and should not outsource government shipbuilding abroad, making it strategically advantageous for South Korean shipbuilders to seize opportunities to invest in the United States. It is unclear, however, how much time and resources should be diverted to revitalizing the domestic naval shipbuilding sector.
Third, robust engagement with key oversight and administrative bodies is important. By sharing detailed information about South Korea’s shipbuilding capabilities, the United States can recalibrate institutional perceptions and pave the way for more flexible procurement models. Informal, closed-door engagements – like those already initiated through the Stimson roundtable – are a promising start.
Fourth, South Korean shipbuilders must invest in targeted public diplomacy and business development strategies within the United States. There is a clear lack of understanding about what Korean firms can offer both in Korea and the United States. Demonstrating the ability to meet both commercial and naval needs, and to co-invest in US facilities under the right conditions, will help win broader political support.
Finally, it is important to reframe the shipbuilding conversation around strategic outcomes, not just fleet numbers. As one keen roundtable observer noted, the Navy is overly fixated on platforms rather than fleet capability. What matters is not just how many ships the United States can build, but whether those ships can operate cohesively, be maintained over time, and be replaced quickly in wartime. More discussion is needed about the vision for the US naval fleet in the 21st century.
Indeed, the history of U.S. maritime decline can be traced back to the 1980s, when the Reagan administration began phasing out federal support for shipyards. In the absence of subsidies and strategic direction, market forces alone proved insufficient to maintain the industrial base. Today’s environment demands a course correction—one that combines industrial policy, allied partnerships, and strategic foresight.
Ultimately, the most dangerous assumption is that the status quo is sustainable. It is not. Without a dramatic and deliberate shift in how the United States approaches shipbuilding both at home and abroad, its ability to project power, deter adversaries, and secure global trade routes will erode. What is needed now is the imagination to act.
This project note is based on a closed-door workshop held at the Stimson Center on May 7, which convened a diverse group of industry representatives, experts, and former and current government officials from both the United States and South Korea. The roundtable focused on the strategic, industrial, and policy challenges related to US shipbuilding capacity and explored actionable paths for bilateral cooperation in naval and commercial shipbuilding. The summary distills key insights, proposals, and themes discussed during the roundtable and aims to inform broader policymaking efforts in the evolving domain of maritime statecraft.
The United States today finds itself in an increasingly precarious position when it comes to naval power and maritime industrial capacity. For decades, shipbuilding in the United States has languished. Once a global leader in maritime construction, the United States now produces a mere 0.1 percent of the world’s commercial shipbuilding output. In the meantime, China has invested aggressively in modernizing its naval fleet and expanding its shipbuilding infrastructure, widening a capabilities gap that now threatens to become a strategic liability for Washington.
That gap, according to a growing consensus of U.S. defense and policy experts, cannot be closed with domestic resources alone – at least not within the timeframe often cited by strategists aiming to deter or prevail in a potential future conflict with a near-peer adversary. The structural deficiencies are too great, the industrial base too eroded, and the regulatory landscape too paralyzing. In the view of key stakeholders in Congress and the administration, meaningful remedies lie not only in reinvestment but also in urgent, creative collaboration with trusted allies. Among those allies, South Korea stands out.
South Korea is home to some of the most efficient and technologically advanced shipbuilders in the world. From constructing warships to deploying cutting-edge autonomous platforms, Korean shipyards have repeatedly proven their capacity to deliver at scale and speed. If the United States is to revitalize its naval posture for the 21st century, a fundamental shift in strategic maritime thinking is needed – what one former Secretary of the Navy has aptly termed a “new maritime statecraft.”
This vision is a call to revitalize maritime power as a core component of US national security and global leadership through the strategic integration of naval hardware, defense, diplomacy, commerce, and innovation, anchored in long-term planning and international cooperation. Crucially, new maritime statecraft must anticipate future challenges – industrial competition over ocean resources, contested maritime territories, and the logistical complexities of a high-tech, distributed naval force. The message is clear: the United States must be bold, forward-looking, and cooperative. It cannot tackle these challenges alone. In this regard, leveraging allied industrial capacity – particularly from countries like South Korea – is not merely a stopgap, but a strategic imperative.
There are several challenges that Washington must overcome in order to deliver on these promises. First, it is essential to provide a clear and consistent demand signal for continued investment by allied shipbuilders in the US shipbuilding industry, as exemplified by Hanwha’s acquisition in 2024 of Philly Shipyard. The SHIPS (Shipbuilding and Harbor Infrastructure for Prosperity and Security) for America Act (“the SHIPS Act”) sets a goal to expand the U.S.-flag international fleet by 250 ships over the next decade, its central objective being the revitalization of the U.S. shipbuilding and commercial maritime industries. While a commendable goal, Korean shipbuilders with an orderbook of more than 100 ships will need more ships on order to make sizable capital expenditure and business development profitable. This means strong demand from the US shipping industry at large enough scale would give reason for Korean shipbuilding companies to invest in the United States for greater market access. The SHIPS Act is a step in the right direction, but domestic maritime revitalization will require greater investment and demand.
Some changes to the existing legal and industrial frameworks may be an option to address the deficiencies of the US shipbuilding industry. These include revising the existing statutory rules and regulations regarding ships manufactured overseas and national security-related restrictions on cross-border partnerships, or overcoming the shortage of skilled labor in U.S. shipyards by bringing in skilled workers from countries like South Korea. Tackling these issues through executive orders or legislative reforms could unlock new alternatives, such as joint production with trusted allies and revitalization of US domestic naval shipbuilding.
Second, there are several ways in which the United States can start to rebuild its domestic naval shipbuilding capacity. One is by exchanging best industry practices with trusted allies. Another way is through the expansion of maintenance and repair of existing ships with allied shipbuilders. An additional consideration is through collaborative modular build-out with the cooperation of allied shipbuilding companies. All of this will take time to implement in meaningful ways. Finally, short-term purchases of foreign-built ships may be an option while the United States increases its domestic shipbuilding capabilities.
There appears to be more room for discussion on this second point as there are notable disagreements about the impact of foreign purchases on the domestic naval shipbuilding sector. At the roundtable, for example, some participants argued that allied shipbuilders can deliver vessels faster and in a more cost-effective manner than domestic alternatives. Others pointed out that political barriers to foreign purchases make it difficult to overcome this hurdle, and there is still time to give domestic naval shipbuilding a chance. Some participants also discussed the significant political, legal, strategic, technical security, and business incentive reasons why the United States cannot and should not outsource government shipbuilding abroad, making it strategically advantageous for South Korean shipbuilders to seize opportunities to invest in the United States. It is unclear, however, how much time and resources should be diverted to revitalizing the domestic naval shipbuilding sector.
Third, robust engagement with key oversight and administrative bodies is important. By sharing detailed information about South Korea’s shipbuilding capabilities, the United States can recalibrate institutional perceptions and pave the way for more flexible procurement models. Informal, closed-door engagements – like those already initiated through the Stimson roundtable – are a promising start.
Fourth, South Korean shipbuilders must invest in targeted public diplomacy and business development strategies within the United States. There is a clear lack of understanding about what Korean firms can offer both in Korea and the United States. Demonstrating the ability to meet both commercial and naval needs, and to co-invest in US facilities under the right conditions, will help win broader political support.
Finally, it is important to reframe the shipbuilding conversation around strategic outcomes, not just fleet numbers. As one keen roundtable observer noted, the Navy is overly fixated on platforms rather than fleet capability. What matters is not just how many ships the United States can build, but whether those ships can operate cohesively, be maintained over time, and be replaced quickly in wartime. More discussion is needed about the vision for the US naval fleet in the 21st century.
Indeed, the history of U.S. maritime decline can be traced back to the 1980s, when the Reagan administration began phasing out federal support for shipyards. In the absence of subsidies and strategic direction, market forces alone proved insufficient to maintain the industrial base. Today’s environment demands a course correction—one that combines industrial policy, allied partnerships, and strategic foresight.
Ultimately, the most dangerous assumption is that the status quo is sustainable. It is not. Without a dramatic and deliberate shift in how the United States approaches shipbuilding both at home and abroad, its ability to project power, deter adversaries, and secure global trade routes will erode. What is needed now is the imagination to act.
