[U.S. Tariffs Season 2] Automobiles and Shipbuilding Find Breakthroughs for Growth Over the Next Half-Century

Automobiles and Steel Face Growing Burden
Shipbuilding Sees More Opportunities for Cooperation; Limited Impact from Tariffs
Rising Demand for Shipbuilding Partnerships Among Allied Nations
Joint Development and MRO Collaboration Accelerate

One year after the United States announced its reciprocal tariffs, downward pressure on the overall domestic industry has intensified. However, the outlook varies sharply by sector. While major export industries to the US, such as automobiles and steel, are struggling against tariff barriers, there are signs of a contrasting trend in some sectors, such as shipbuilding, where cooperation with the US is actually expanding.

On December 22 last year (local time), the Goliath crane at Hanwha Philly Shipyard in Philadelphia, Pennsylvania, USA. Photo by Yonhap News.

According to the industry on April 3, the US’s efforts to revive its shipbuilding industry are accelerating the global reorganization of shipbuilding supply chains. The shipbuilding sector has a low proportion of direct exports to the US, so the impact of tariffs is limited. At the same time, there is a rapid increase in demand for cooperation centered on allied nations.

An official in the shipbuilding industry said, "Since our structure does not involve direct deliveries to the US, but rather orders placed mainly by Northern European and Middle Eastern shipping companies, the impact of tariffs is not significant. Moreover, as it is difficult for the US to secure its own shipbuilding capabilities in a short period, demand for cooperation is expanding."

This trend is leading to substantial increases in cooperation, allowing domestic companies greater flexibility. Korean shipbuilders are expanding their collaborative base by pursuing joint development and joint construction projects with US-based shipyards. Affiliates of HD Hyundai are reportedly pursuing joint construction with Huntington Ingalls Industries (HII) and others, after signing memorandums of understanding (MoUs).

The core driver behind these changes is the shifting dynamics resulting from global power competition. An industry official explained, "The biggest competitor for Korea’s shipbuilding industry is China, and the US, seeking to keep China in check, increasingly sees the need to cooperate with Korea. In particular, the outdated facilities and production systems of the US shipbuilding industry align with Korea’s advanced manufacturing technology, creating a convergence of interests."

These efforts are already producing visible results. Recently, Hanwha Ocean secured a maintenance, repair, and operations (MRO) contract related to the US Navy, speeding up its entry into the American shipbuilding market. Samsung Heavy Industries is also expanding its cooperation base by participating in the conceptual design of the next-generation logistics support ship with General Dynamics NASSCO.

Geopolitical risks originating from the Middle East are also analyzed to have only a limited impact on the shipbuilding sector. An industry official noted, "Shipbuilding is a long-cycle industry where order cancellations are rare, so demand fluctuations due to external variables are not significant. In fact, there are signs of increasing demand in certain ship types."

An industry official stated, "It will inevitably take considerable time for the US to elevate its shipbuilding capabilities to the desired level. Regardless of the tariff environment, shipbuilding will continue to present opportunities for cooperation and new orders."

This content was produced with the assistance of AI translation services.