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🇰🇷 South Korea /Economy & Trade

South Korea, US launch $150 billion shipbuilding cooperation project

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • South Korea and the United States have signed a $150 billion memorandum of understanding for cooperation in the shipbuilding industry.
  • This initiative, dubbed 'MASGA' (Make America Shipbuilding Great Again), aims to revitalize US shipbuilding.
  • The profits from this investment will exclusively benefit South Korean companies, while the US will provide necessary infrastructure and support.

South Korea and the United States have formalized a significant partnership aimed at revitalizing the American shipbuilding sector. On Tuesday, policy financial institutions and shipbuilders inked a memorandum of understanding to implement a $150 billion shipbuilding cooperation investment, a key component of the US's 'MASGA' (Make America Shipbuilding Great Again) project.

This initiative represents a crucial step in fostering bilateral economic ties, distinct from a broader $200 billion strategic industrial investment agreement that shares profits between both nations. Under the MASGA project, all profits generated from the shipbuilding cooperation will be channeled back to South Korean companies, underscoring a strategic focus on leveraging their expertise.

The agreement was signed at the Korea Export-Import Bank in Seoul, with key figures including Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, Financial Services Commission Vice Chairman Kwon Dae-young, and Ministry of Trade, Industry and Energy Industrial Policy Office Director Park Dong-il in attendance. The pact establishes a 'Korea-US Shipbuilding Cooperation Investment Council' comprising policy financial institutions like the Exim Bank of Korea and Korea Development Bank, along with major shipbuilders HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean.

Our world-class shipbuilders will help rebuild the US shipbuilding industry, while our entire shipbuilding ecosystem, from large corporations to SMEs and parts suppliers, will gain new orders and markets.

— Koo Yun-cheolDeputy Prime Minister and Minister of Economy and Finance, describing the mutual benefits of the shipbuilding cooperation.

This council will facilitate information exchange, identify business opportunities, and coordinate policy financing support. Deputy Prime Minister Koo emphasized the reciprocal benefits, stating, "Our world-class shipbuilders will help rebuild the US shipbuilding industry, while our entire shipbuilding ecosystem, from large corporations to SMEs and parts suppliers, will gain new orders and markets." He urged financial institutions to provide timely and sufficient funding, particularly for the risks and uncertainties associated with initial investments.

The cooperation will involve supporting South Korean shipbuilders through guarantees and vessel financing, with all associated profits flowing to Korean firms. The US, in turn, will provide essential resources such as land, water, electricity, and purchase agreements necessary for project execution. This aligns with President Lee Jae-myung's recent discussions with President Donald Trump at the G7 summit, where Trump inquired about the rapid construction of 10 US warships, highlighting the critical need to bolster American naval capacity, which currently accounts for less than 1% of global merchant vessel construction.

Can you quickly build 10 US warships?

— Donald TrumpPresident of the United States, asking about South Korea's shipbuilding capacity during a G7 summit.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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