Newscasts - South Korea aims to use Trump's focus on shipbuilding in tariff talks

HUNTINGTON INGALLS INDUSTRIES

25/07/2025 11:01

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Source: 'Reuters - General news videos'

Description: South Korea and the United States have been discussing a shipbuilding tie-up that could include investments to modernize U.S. shipyards and more help to repair the U.S. naval fleet as Seoul seeks better tariff terms, government and industry sources said. Ryan Chang has more.

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Video Transcript:

Pressure is growing for South Korean officials to reach a deal on tariffs, after Japan's success in striking a trade agreement with the US this week. Now a shipbuilding partnership is one idea being discussed, according to government and industry sources in exchange for better terms. A source says the tie-up would see Seoul invest in modernizing US shipyards and give more help to repair US navy vessels. South Korean trade officials, who declined to be named, say the country's proposal of a "Korea-US manufacturing renaissance partnership" in areas such as shipbuilding had drawn strong US interest. Donald Trump has made it a priority to revamp the aging US shipbuilding industry in order to keep up with China, the market leader. His interest in Korean shipbuilding dates back to a 1998 helicopter trip to visit Geoje shipyard. Lim Moon Kyu, a retired senior executive at the former Daewoo Shipbuilding company, remembers accompanying the VIP guest, who stood on top of a high crane to view the yard on a southern island.

I think he must have felt that the size of the ship and shipyard were humongous.

Clearly, he was impressed, saying "Wonderful, Wonderful," since he didn't know about shipbuilding. Lim thinks the occasion left a lasting impression on Trump that primed him to work with Korean shipbuilders to counter China.

What carrots can we give to the United States except shipbuilding? Nothing but shipbuilding would be immediately possible, helpful to South Korea and a huge help to the US.

The repair of US Navy ships already happens in South Korea, at Hanwha Ocean's Geoje shipyard, which has the world's largest dock. Hanwha has also recently increased its stake in an Australian shipbuilder which owns a shipyard in Alabama building US navy vessels. And another South Korean shipbuilder, HD Hyundai, formed a partnership this year with US defense-focused shipbuilder Huntington Ingalls. A researcher told Reuters the most realistic option for South Korea is to make a deal to fix a certain number of US navy vessels annually or build parts for new ships. But obstacles remain to expanding the relationship. Woo Jong Hoon, a marine expert at Seoul National University says, US yards struggle to obtain parts and find local talent, while there's also a raft of US regulations that protect domestic shipbuilding.

Ultimately, I think it is necessary for the South Korean government to control Hanwha and HD Hyundai well to establish a strategy and become a control tower that can make suggestions to the United States.

Woo said South Korea could skirt US regulations by building sections of ships to be delivered to US yards for assembly or, they could designate a South Korean shipyard as a special district where it's permitted to make US naval vessels.