Can Trump Be Trusted on His MASGA Pledge?[Yang Nakgyu's Defence Club]

Maritime powerhouse United States, shipbuilding industry undone by complacent legislation
Opportunity for K-shipbuilding, but beware chronic ills of U.S. shipyards

The United States is reaching out to allied countries to rebuild its shipbuilding industry. Many see this as an opportunity for Korea's shipbuilders. However, there are also warnings that caution is needed, as the chronic structural problems of U.S. shipbuilding, such as high costs and a collapsed supply chain, have not been resolved.

Yonhap News Agency

The United States was once the world's strongest shipbuilding power. Its complacency and greed were considerable. In 1920, it enacted the Jones Act, which stipulated that only vessels built in the United States could be used for maritime transport within U.S. waters. This was followed in 1965 and 1968 by the Burns-Tollefson Amendments, which stated that U.S. military vessels and key components could not be built at foreign shipyards. These laws turned into poison. Shipyards that lost competitiveness began to disappear without a trace. The roughly 400 shipyards that existed during World War II (1939-1945) dwindled to 21.

Jones Act and Burns-Tollefson Amendments as toxic medicine

Naval power was weakened. When President-elect Donald Trump won the presidency in 2016, he pledged to expand the U.S. Navy to a 350-ship fleet. The results were minimal. Only 21 warships were built over four years. Under the Biden administration, five warships were decommissioned, reducing the fleet to the current 291 ships.

According to an analysis last year by the Center for Strategic and International Studies (CSIS), China built 23 destroyers over the past decade, while the United States built only 11. In the case of cruisers capable of long-range missions, China has built eight since 2017, whereas the United States has not built a single one. About 70% of Chinese warships have been launched since 2010, but for the U.S. Navy, the share is only 25%.

Collapse of shipbuilding industry leaves U.S. warships facing helpless delays

The U.S. shipbuilding industry remains weak today. Construction of warships is being delayed from as little as 12 months to as long as 36 months. In a report, the U.S. Navy stated, "The Columbia-class ballistic missile submarine program has been the Navy's top-priority program since 2013. For more than 10 years, we have prioritized all resources and exercised significant management to prevent schedule delays, yet a delay of 12 to 16 months is expected," adding, "This shows the situation currently facing the Navy's shipbuilding sector."

In the end, Washington turned to its allies. The Trump administration presented a blueprint to rebuild the domestic shipbuilding industry in cooperation with allies such as South Korea. This is the Korea-U.S. shipbuilding cooperation project known as MASGA. On February 13 (local time), Secretary of State Marco Rubio and Office of Management and Budget (OMB) Director Russell Vought announced "AMERICA'S MARITIME ACTION PLAN" (hereinafter the Action Plan). In the Action Plan, the White House stressed that it would "continue the historic cooperation with South Korea and Japan to revitalize U.S. shipbuilding."

Trump pushes the Bridge Strategy

The aspect drawing particular attention from Korea's shipbuilding industry is the "Bridge Strategy," which sets out a phased cooperation plan with foreign shipbuilders. Under the Bridge Strategy, foreign shipbuilders make capital investments in U.S. shipyards through acquisitions or partnerships, and until production within the United States ultimately becomes feasible, a portion of the initial contracted volume is built in the foreign shipbuilder's home country.

The key issue is the structural defects of the United States. The problem lies in chronic ailments of U.S. shipbuilding, such as its high-cost structure and collapsed supply chain, which cannot be resolved in the short term. There have also been failures by those who tried to enter U.S. shipyards. In the 1990s, Kvaerner Group, then Europe's largest shipbuilder, reopened the Philadelphia Shipyard in 1997, armed with advanced technology and capital, but it failed to overcome the uniquely hardline U.S. union culture and an inefficient parts supply chain. In the end, it could not lower unit costs, suffered repeated failures in winning orders, and withdrew after a bitter experience. In 2020, when the U.S. Navy pursued the Constellation-class next-generation frigate program, it adopted designs from Italy's Fincantieri. The problem was a shortage of skilled workers. Construction was delayed by more than three years and costs surged.

Lack of skilled workers and inefficient parts supply chain are the core issues

There is also a regulatory framework that must be addressed: the Buy American Act. Championed by U.S. hardliners, it requires that 60-75% of materials be sourced from the United States. In reality, however, this is impossible, because dependence on foreign countries for key components is overwhelming.

An industry official said, "Given the practical limitations, easing regulations and leveraging allied countries is the only alternative," adding, "If the United States wants to rapidly reinforce its forces in an emergency, it must actively use Korean and Japanese shipyards, which possess overwhelming shipbuilding capacity, as partners of the U.S. Navy."