Korean Media: The US "Defense Authorization Act" Removed the Clause of "Prioritizing South Korean Shipbuilding Industry"!
On January 15, the Korean media "Global Economy" published an article stating that it has been confirmed that a clause requiring the prioritization of South Korean shipbuilding companies investing in the US was removed from the 2026 fiscal year "Defense Authorization Act" passed by the US Congress. This is seen as a setback for South Korea's strategy to expand its shipbuilding industry in the US, which was previously implemented through agreements between South Korean and US leaders.
The draft of the "Defense Authorization Act" passed by the US Senate in October 2024 included a clause requiring the US Secretary of the Navy to submit a report on promoting the construction of new civilian shipyards on the Pacific coast. It also included a study of the potential for foreign shipbuilding companies to invest in the US, with a priority given to South Korean and Japanese companies. This move was seen as a highly symbolic action because it aligned with the South Korean government and industry's long-standing vision for shipbuilding cooperation with the US.
At that time, this clause was interpreted as a recognition by the US Congress that leveraging the technology and production capacity of allies would restore the competitiveness of the US shipbuilding industry. Especially in a situation where the US naval and merchant shipbuilding capabilities are significantly lagging behind China, the productivity and technological strength of the South Korean shipbuilding industry were seen as a potential solution.
However, during the final coordination process between the Senate and the House of Representatives, this wording was deleted. The "Defense Authorization Act" passed by the US Congress does not include any specific clauses benefiting foreign shipbuilding companies. On the other hand, the act instructs the development of a comprehensive strategy to improve the infrastructure of existing public shipyards and enhance the overall capability of the shipbuilding industry.
In the US Congress system, when the Senate and the House of Representatives pass bills with different wording, a conference committee is established to create a unified version. This process seems to have had a significant impact on the House of Representatives' position. The House of Representatives has always prioritized local employment and union interests. It is widely believed that the concern that foreign companies entering the US shipbuilding industry could lead to American unemployment was the main driving force behind the House of Representatives deleting this clause.
In fact, the US shipbuilding industry and its unions have always been cautious about foreign companies directly operating shipyards or holding equity. Although they recognize the necessity of strengthening shipbuilding capabilities in the context of the Sino-US strategic competition, the call for "producing in the US and employing Americans" seems to have had considerable influence on the political sphere.
The current "Defense Authorization Act" still retains the clause restricting the overseas construction of US warships. This means that there are still many obstacles in utilizing allied shipyards. For the South Korean shipbuilding industry, the current challenge lies in how to adjust its strategy for establishing production bases in the US, in addition to securing orders and technological cooperation.
Original article: toutiao.com/article/1854347921554443/
Statement: This article represents the views of the author alone.