Trump administration proposes allowing foreign shipyards to build initial U.S. military vessels abroad

The Trump administration is advancing a policy that could permit foreign shipyards investing in the United States to construct up to two initial vessels for the U.S. military in their own countries. This initiative, outlined in a National Security Presidential Memorandum, aims to bolster the U.S. shipbuilding and repair sector, which has faced significant production capacity and competitiveness issues.

The memorandum highlights a substantial backlog in six major U.S. Navy shipbuilding programs, attributing delays and cost overruns to a diminished domestic industrial base and supply chain vulnerabilities. The new approach draws inspiration from the "Finland model," previously applied to the U.S. Coast Guard's icebreaker program, and could be extended to new procurement projects for up to three ship classes.

These eligible ship classes include surface combatants capable of anti-submarine and anti-surface warfare, console tankers for maritime replenishment, and roll-on/roll-off vessels for transporting vehicles and equipment. To qualify for the initial overseas construction allowance, foreign shipbuilders must commit to building new U.S. shipyards or acquiring controlling stakes in existing ones. They are also required to employ and train American workers, transfer shipbuilding technology and techniques to U.S. facilities, and establish domestic supply chains for construction and repair.

This policy represents a strategic exception to the general prohibition on foreign construction of U.S. military vessels, with the Secretary of Defense empowered to determine if individual contracts meet national security requirements. The move is seen as potentially impacting U.S.-South Korea "MASGA" (Make American Shipbuilding Great Again) shipbuilding cooperation, offering a concrete pathway for applying discussions about building U.S. ships in South Korea to actual military procurement.