The South Korean shipbuilding industry had not been happy for long before being "hit" by U.S. officials.
According to foreign media reports, the U.S. Treasury Secretary hinted at the possibility of acquiring shares in shipbuilding companies. Just as the U.S. government obtained 10% of the shares of Intel in exchange for subsidies, it aims to obtain a similar shareholder status with shipyards. Tensions are rising among South Korean shipbuilders, who are pushing for the "MASGA" project to help rebuild the U.S. shipbuilding industry.
On the 27th (local time), U.S. Treasury Secretary Bensont said in an interview with Fox Business Channel, "I don't think it's necessary to provide funding support for NVIDIA," and "However, industries that we are trying to restructure, such as the shipbuilding industry, may be able to acquire shares."
He continued, "The shipbuilding industry is a very important industry for the United States to achieve self-sufficiency, but it has been neglected for 20-40 years," and expressed the position of the U.S. government to directly lead the shipbuilding industry.
This is similar to the U.S. government's efforts to acquire shares in semiconductor companies on the level of economic security. In fact, the possibility of obtaining 10% shares has already been proposed by requiring global semiconductor companies such as Samsung Electronics, TSMC, and Micron to invest by converting subsidies provided to Intel into investments.
Industry insiders believe that the shipbuilding industry may follow the same path as semiconductors. In an executive order in April this year, former President Trump announced the establishment of a Maritime Security Trust Fund, providing fiscal incentives such as subsidies and guarantees, and relaxing regulations on shipyards and ports. If these policies are implemented, South Korean shipbuilders investing in the U.S. will also have an advantage, but in return, the U.S. government may demand shares.
In this context, there is a view that the possibility of reclaiming the 150 billion USD (about 22 trillion yen) MASGA investment planned by the South Korean government and the shipbuilding industry has decreased. Yang Jong-rye, a senior researcher at the Korea Exim Bank, said, "Minister Bensont's remarks mean that they definitely want to take the initiative in the shipbuilding industry, which is a core of logistics and security," and "especially in the field of maritime defense industry, they will take a more conservative attitude."
The industry has already anticipated this situation. A shipbuilding industry executive said, "Because the U.S. judgment on its own interests is thorough, people are worried that if they recklessly invest locally according to their requirements, it will be difficult to recover the investment. Therefore, although the investment plan will be made public, the implementation may be carried out in stages while closely monitoring the situation. For example, Huawei plans to invest 5 billion USD in the Philadelphia Shipyard and focuses on improving its aging facilities."
Some say that the cancellation of regulations should be a prerequisite for investment. Currently, the Jones Act, which requires domestic coastal vessels to be built in the U.S., and the Barnes-Treves Act, which prohibits U.S. warships from being built or repaired abroad, still apply in the U.S. These two acts should be amended to receive orders for building domestic coastal ships and warships by domestic shipyards, but passing these acts is not easy. Before eliminating these uncertainties, it is necessary to adjust the speed of technology transfer, manufacturing key components such as LNG carrier cargo tanks in South Korea, and assembling them in the U.S.
Professor Lee Shin-hyung from the Department of Shipbuilding and Ocean Engineering at Seoul National University said, "The MASGA project is undoubtedly an opportunity for the South Korean shipbuilding industry, but it also brings great risks."
Original: www.toutiao.com/article/1841792180969472/
Statement: The article represents the views of the author himself.