President Donald Trump has vowed to lead a revival in U.S. shipbuilding, but the success of this manufacturing renaissance in a key sector for national security will rely on the expertise from overseas.
The administration’s goal of a shipbuilding boom is a part of Trump’s “Make America Great” policy agenda. Trump signed an executive order in April to bolster the shipbuilding industry, but many industry executives have warned it won’t be easy given the current state of the domestic industry, and foreign investment and collaboration are key. The Trump administration’s “Make American Shipyards Great Again” initiative is looking to build out liquified natural gas tankers, polar ice-breakers, and Navy vessels.
“The American shipbuilding industry saw a boom twice in the past 110 years,” Peter Sand, chief shipping analyst at Xeneta, tells CNBC. “The first boom was during World War I, the second, World War II,” he said.
China, which has roughly 232 times the shipbuilding capacity of the U.S., dominates the global commercial shipbuilding industry. The U.S. presently has eight active shipyards. China has over 300.
The Trump administration’s shipbuilding plan is an extension of an investigation into Chinese shipbuilding by the United States Trade Representative under the Biden and Trump administrations. The USTR 301 investigation found the Chinese government has bolstered its shipbuilding dominance through the use of significant subsidies and designating the industry as strategic. The investigation said the acts, policies, and practices were “unreasonable and burden or restrict U.S. commerce.”
The U.S. recently began to charge fees on ships built in China visiting U.S. ports, which led to retaliatory measures from China, but the two nations agreed to a one-year pause as part of a November trade truce.
In 2008, China surpassed Japan in shipbuilding output. In 2010, China overtook South Korea to become the world’s largest shipbuilder, both in production capacity and new orders. Since then, China’s lead has continued to grow. Its global market share in shipbuilding stands at 53%, followed by South Korea and Japan.
The 2025 order book for new vessels shows China accounts for 75 percent of orders, with South Korea at 19 percent, and the U.S. at 0.2 percent, according to data shared by Sand.
“When you look at the orders, making American shipbuilding great again is a tall order. Foreign expertise needs to be brought in,” Sand said.
Key foreign companies involved in U.S. shipbuilding
To bolster the country’s shipbuilding and training of U.S. workers, the Trump administration has inked deals with foreign shipbuilders.
Three shipbuilding affiliates of South-Korean based Hanwha Group, the third-largest shipbuilder in the world, are playing a key part in this plan.
During July trade negotiations, South Korea and the United States announced a $350 billion investment deal, with $150 billion of that money to be allocated to maritime investment. The overall trade deal was finalized in November, with auto tariffs on U.S. imports from Korea reduced to 15 percent (from 25 percent).
“Why should you reinvent the wheel? There is a good reason for fiends and allies to work together and capitalize on a company’s expertise and experience,” Sand said.
South Korea began to increase its presence in the U.S. maritime industry in 2024, with the $100 million acquisition of Philly Shipyard in Philadelphia from Norwegian industrial investment group Aker ASA. The yard was then renamed Hanwha Philly Shipyard.
Vessel construction at Hanwha Philly Shipyard
Shawn Baldwin
In August, Hanwha Group announced a $5 billion infrastructure plan, part of the $150 billion investment, for Hanwha Philly Shipyard to bring the site up to speed so it can expand its vessel-making capacity from 1-1.5 vessels a year, eventually to 20 vessels.
Hanwha Philly Shipyard received its first order for a U.S.-built, export-ready LNG carrier from Hanwha Group’s shipping arm, Hanwha Shipping, in July. It was the first order in nearly 50 years. A second order for an LNG vessel was made in August. Deliveries are expected around 2028 and are being made possible through a joint-build model with Hanwha Ocean’s Geoje Shipyard in South Korea. The joint-build model is a necessity due to the the lack of vessel-building capacity at the shipyard in Philadelphia and staffing.
Hanwha Ocean makes 50-60 vessels a year.
“One of the challenges the industry faces is the workforce,” said David Kim, CEO of Hanwha Philly Shipyard.
The biggest bottleneck in training that workforce, says Kim, is the lack of U.S. instructors. To remedy this, Hanwha will train employees by rotating the U.S. workforce from Philadelphia to the yard in South Korea. “It’s our greatest advantage,” said Kim. “The people who are good and you want to train U.S. workers are the people working in the yard,” he added.
The company is also looking to expand its apprenticeship program.
“We have 1,700 workers to date,” Kim said. “If you look at our aspirations to deliver those 20 ships a year, our staff down the road is going to be closer to 10,000 plus,” he added.
Oil, LNG, and creating demand for U.S. freight vessels
The LNG vessel orders are not the only Hanwha company-generated orders on the books for the Philly shipyard. Hanwha Shipping has also ordered 10 medium-range tankers used for oil and chemical transport, the largest U.S. commercial vessel order in more than two decades. The first ship is expected to launch in 2029.
“There are currently 55 Jones Act oil tankers in the world, and 7,500 oil tankers in the world,” said Andy Lipow, president of Lipow Oil Associates.
The Jones Act requires vessels that transport goods between U.S. ports to be U.S.-built, owned, crewed, and flagged.
“In LNG, the U.S. shipbuilding industry for all intents and purposes is not participating,” Lipow said. There are roughly 750 LNG tankers in the world, and there’s only one LNG tanker that is flagged in the United States, “and it was built in France,” he said.
But the lack of U.S.-built tankers has not impacted the growth of U.S. LNG exports or crude.
“The United States LNG market is not at a disadvantage. We’re currently exporting nearly 30% of our crude oil production and not having any trouble finding tankers,” Lipow said.
Nuclear maritime ambitions
During Trump’s recent Asia tour, the president announced Hanwha would make its first nuclear-powered sub at the Philly Shipyard. Hanwha makes large naval submarines in South Korea.
“The U.S. needs its own ability to make ships and submarines for its own security and resiliency,” said Alex Wong, global chief strategy officer for Hanwha Group. “God forbid, in times of war, you need the ability to regenerate and make a naval vessel,” Wong said. “That’s the way you not only win a war, but you deter a war.”
In August, Trump ordered the movement of two nuclear submarines in response to threats from Russia.
The timing of the submarine being built at the Hanwha Philly Shipyard is dependent on the ongoing discussions between the South Korean and U.S. government.
“Also important to the time is the availability of technology and the resources,” Kim said.
The U.S. Navy continues to build out its technological infrastructure. The Navy and Palantir Technologies recently announced “ShipOS,” software that they said will help build and maintain American submarines. The software down the road might also be used for aircraft carriers and jets.
Italian shipbuilder with Wisconsin ties also playing a role
In addition to South Korea, Finnish and Italian companies are also being tapped to expand U.S. shipbuilding. Italian Prime Minister Giorgia Meloni reconfirmed in a joint statement with Trump the country’s commitment to U.S. shipbuilding in an April meeting.
The key Italian company in this initiative is Fincantieri Marinette Marine (FMM), which was founded in Wisconsin in 1942 as Marinette Marine to build naval vessels for World War II before later being acquired by the Italian company. President Trump toured the company’s Wisconsin shipyard during his first term.
The company recently laid off 93 employees, about a week after the Navy canceled four frigate ship orders that would have been built in Wisconsin. Instead of building six, the company will now be building two.
Welder working on vessel component at Fincantieri Shipyard in Green Bay, Wisconsin
Shawn Baldwin
In addition to the Navy, Fincantieri also makes LNG and other commercial vessels, such as cruise ships. Its Wisconsin shipyards are considered to be among the most modern and advanced.
“There are many hands here that touch the vessel,” said George Moutafis, CEO of Fincantieri Marine Group. “Almost 3,000 employees all have a part in the shared work across the three yards.”
The network of suppliers for the vessel components or materials increases the overall employment related to shipbuilding.
“We have about 800 suppliers in 40 states, 300 of these suppliers are here in Wisconsin and Michigan,” Moutafis said. “So shipbuilding takes a village and more,” he added.
Race for control of the Arctic
The U.S. is also lagging in the shipbuilding race for polar ice-breaker vessels. The U.S. Coast Guard has three icebreakers. Russia has the largest polar fleet in the world, with 57 icebreakers and ice-capable patrol ships, as of 2022 data. China has five icebreakers.
One U.S. ship, the Polar Star, is rated as a heavy icebreaker and is deployed to Antarctica. That vessel is 49 years old. Two medium icebreakers, USCGC Healy (25 years old) and USCGC Storis (built in 2012, acquired by USCG in 2024, and modified), are rated as medium icebreakers and are used in the Arctic route.
The U.S. government’s push into the Arctic is related to defense considerations. The Northern Sea Route follows Russia’s Arctic coast, and the Northwest Passage, which crosses the Canadian Arctic Archipelago, cuts down travel time between North America and Europe by several weeks. If the vessels did not use this polar route, the ships would have to go around North America and travel through the Panama Canal or the Suez Canal.
In the future, the Transpolar Sea Route, a mid-ocean route across the central Arctic, offers the shortest distance but requires heavy icebreakers and is largely ice-covered. To close the gap in polar ice breaker production, the United States is turning to Finland, which is known to be the leading country in polar icebreaker manufacturing and design.
On October 9, the U.S. and Finland signed a memorandum of understanding on icebreaker construction at the White House. The $6.1 billion agreement outlined that the U.S. Coast Guard would acquire 11 new icebreaker ships. Under the deal, Finnish shipyards Helsinki Shipyard (owned by Canada-based Davie Defense) and Rauma Marine Constructions will build four arctic security cutters while U.S. shipyards construct an additional seven. The first icebreaker is scheduled for delivery in 2028.
In November, a joint statement of intent was announced between the U.S., Canada, and Finland to advance shipbuilding and Arctic defense collaboration under the Icebreaker Collaboration Effort (ICE) Pact, which was first announced in July 2024 by President Biden, then-Canadian Prime Minister Justin Trudeau, and Finland’s President Alexander Stubb at the NATO Summit in Washington, D.C.
In early December, Davie’s acquisition of the Gulf Copper & Manufacturing Corp.’s shipbuilding assets in Port Arthur and Port of Galveston, Texas, was approved by the Committee on Foreign Investment in the United States, which reviews foreign acquisitions on national security grounds.