Visible Korea-US Shipbuilding Cooperation?... Positive US Response to Minister Andeokgeun's Proposal for 'Large-scale Orders'

Possibility of Large-Scale Package Orders for Warships, Tankers, and Icebreakers

Minister of Trade, Industry and Energy Anduk Geun recently proposed a cooperation plan during his visit to the United States, suggesting that Korean shipbuilding companies could prioritize winning and delivering large-scale ship orders from the U.S., and it is reported that the U.S. side responded positively to this proposal.

According to the Ministry of Trade, Industry and Energy on the 3rd, Minister Ahn held discussions on trade and energy from the 26th to the 28th of last month in Washington DC with U.S. Commerce Secretary Gina Raimondo, Doug Burgum, Chairman of the White House National Energy Council and Secretary of the Interior, and Ambassador Katherine Tai of the U.S. Trade Representative (USTR), among others.

Regarding Minister Ahn’s proposal that Korea is ready to manufacture and deliver in advance in line with the U.S. plan to place large-scale package orders for ships such as warships, tankers, and icebreakers, the U.S. side reportedly responded with "Thank you." The Korean government is said to have confirmed its position that it can handle long-term large orders by adjusting existing contract schedules through prior discussions with major shipbuilding companies.

Minister Ahn announced that a government-level task force (TF) has been formed to promote Korea-U.S. shipbuilding cooperation, emphasizing the need for both countries to prepare flexible cooperation measures before the U.S. revises shipbuilding-related laws and regulations, which will take time.

In addition, Minister Ahn proposed that Korea could increase purchases of U.S. energy, focusing on gas. Previously, President Trump had declared the expansion of energy exports, emphasizing the revitalization of the fossil fuel industry.

Minister Ahn also explained that regarding the key U.S. trade issue of the trade deficit, Hyundai Motor’s factory under construction in Georgia, which has the highest share of Korea’s trade surplus with the U.S. in the automobile sector, will begin full operation next month, contributing to the reduction of the trade deficit through increased domestic production in the U.S.

This visit by Minister Ahn to the U.S. is interpreted as an attempt by Korea to propose cooperation in line with the U.S.’s strategic interests and to secure some leadership in Korea-U.S. trade relations. In particular, the move to attract large-scale orders from the U.S. in the shipbuilding sector is expected to yield positive results in terms of expanding orders for domestic shipbuilders and securing stable production volumes.

However, overcoming the protectionist stance and related legal and institutional barriers in the U.S. is key to turning this into practical cooperation. Although Korea has shown a proactive willingness to cooperate, it remains uncertain under what conditions the U.S. will actually pursue this.

Regarding trade balance, while Korea emphasized its role through the operation of the Hyundai factory, it remains to be seen how much the U.S. side will accept this. Given that existing trade frictions, such as subsidy discrimination against Korean electric vehicles, have not yet been resolved, the possibility that the U.S. may demand additional concessions in other industries, including automobiles, cannot be ruled out.