[WEEKLY FOCUS] How can S. Korea, U.S. find 'win-win' opportunities in shipbuilding?

This week, amid ongoing discussions between Seoul and Washington on how to balance trade and ease the tariffs set by the Trump Administration, shipbuilding has been highlighted as one area that could deliver a win-win solution for both sides.

With the visit of U.S. Secretary of the Navy John Phelan to South Korea, where he stopped by two of the country's shipbuilding giants, there's been growing anticipation towards industrial cooperation in this sector.

We have our Oh Soo-young in the studio to talk about the prospects.

Q1. Now, let's begin with why shipbuilding has been raised as a crucial industry for greater cooperation.

Sure, so America's global leadership has been characterised by its dominant naval capacity since the end of World War 2.

Sustaining and expanding its fleet is essential to maintaining its military might, especially here in the Indo-Pacific, where the country is facing increasing competition from China, according to Dr. Peter Lee at the Asan Institute for Policy Studies, who authored a report on shipbuilding cooperation last December.

"So if you think back to the 20th century when the U.S. was a great manufacturing power during the Second World War, for instance the United States built 5,000 ships during the war that was more than Germany and Japan combined, and you fast forward to today and now the PLA navy is actually larger than the United States Navy but more importantly it's actually all concentrated in Asia. And then secondly, if you look at the commercial side, China built somewhere between about 1,700 ships last year, the United States built between three and five."

Under the Navy's 2025 shipbuilding plan, the U.S. aims to build a fleet of 390 battle force ships over the next 30 years.

However,.. due to rising costs, delays, and labour shortages, ships are retiring faster than new ones are being added.

2. Right and it seems the U.S has been shifting towards working with allies. What advantages do these countries have to offer?

Well for South Korea, it was the world's second largest shipbuilding nation as of last year, with its big 3 shipyards HD Hyundai Heavy Industries, 현대중공업, 한화오션, 삼성중공업이 세계 선박의 4분의 1에서 3분의 1을 생산했습니다.

China has generally held the lead in terms of the number of vessels ordered, while South Korea often surpasses China in order value due to its focus on more expensive, technologically advanced ships.

So you could say Korean shipyards are ready to help America build its ships, from warships to smaller vessels, with world-class infrastructure.

This could drive down construction costs for the U.S. Navy, while building up sturdy global defence supply chains.

Maintenance is also a crucial area for collaboration, and could provide more immediate benefits, according to Dr. Yu Ji-hoon, a former Navy Commander.

"When we collaborate closely in shipbuilding and Maintenance, Repair, and Overhaul activities, we directly enhance our mutual defense capabilities. Such cooperation helps standardize equipment, streamline logistics, and reduce overall maintenance costs through economies of scale."

Jointly investing into future technologies, such as greater automation capabilities, is another way to help America maintain the most advanced naval technology and prowess as well as address other fundamental shortages such as its workforce both in shipbuilding and the navy.

"Given the sheer scale of China's naval shipbuilding lead right now, how do we close that gap? And I think really there is a great argument to be had about using emerging technologies, uncrewed systems and drones for instance, to really leap rock and catch up to China. So there's a lot of work that Korean, Japanese, and other allied countries are doing in terms of uncrewed navigation and uncrewed systems and I think there's a lot of work to be done with the commercial sector there."

But ramping up shipbuilding in the U.S. will inevitably take time.

Bringing cooperation to this side of the Pacific could present both short and long-term opportunities to help the U.S. swiftly ramp up its fleet and partnerships.

3. But the Trump Administration is all about domestic industries, and more investment in America.

So that's the question. While Trump himself has recognised the importance of increasing maritime capacity, concerns still remain over his America First protectionist policies focusing on boosting domestic industries.

The U.S. Navy Secretary has indeed indicated more investment would be welcome, but his visit to HD Hyundai and Hanwha Ocean this week has been a positive sign for deeper cooperation.

"Industrial cooperation, especially in areas like shipbuilding and sustainment, is increasingly critical for strengthening traditional security alliances today. From my perspective, modern security dynamics require more than just political alignment they demand practical interoperability and shared operational readiness among allies."

To present a true win-win situation for all sides both in terms of national security and economic benefits companies will need more motivation to jump in.

"So I think there's an opportunity there for Korean companies but also the Korean government to really use this priority sector of shipbuilding to demonstrate that Korea can play an alliance burden-sharing role in helping meet a very critical U.S. strategic need but also that for Korean companies that this is a profitable endeavor that has a long term future and for instance the global maintenance repair and overhaul market is worth about 60 billion dollars a year."

The two major Korean shipyards have already invested into the U.S.,

HD Hyundai inked an MOU with the largest military shipbuilder in the U.S. to collaborate on naval shipbuilding in Mississippi.

And Hanwha Ocean last year acquired Philly Shipyward.

For closer partnerships to revitalise American naval capacity, legal changes will have to be made.

So the "Ensuring Naval Readiness Act" was introduced by U.S. lawmakers this year.

It proposes permitting vessel construction in shipyards located in allied countries in the Indo-Pacific and NATO, namely South Korea and Japan.

Commander Yu suggests stronger bilateral efforts could help propel such cooperation.

"Setting clear interoperability standards and co-production frameworks would ensure seamless alignment in ship designs and maintenance practices. Expanding joint research and development initiatives, particularly focusing on advanced naval technologies such as unmanned vessels and next-generation propulsion systems, could significantly enhance our combined maritime capabilities. Formalizing bilateral agreements dedicated to naval MRO cooperation would allow us to quickly capitalize on South Korea's proven strengths to support the U.S. Navy's operational needs in the Indo-Pacific."

We'll have to see how bilateral consultations play out. But shipbuilding seems like a key area of cooperation.

Thanks for your coverage today.