US eyes South Korean shipyards amid China naval expansion fears
Asia's fourth largest economy South Korea, like many other Asian nations is facing painful tariffs by U.S. President Donald Trump, but its shipbuilding industry could prove a useful bargaining chip.
Already hit by sector levies on steel and car exports, Seoul is laser-focused on negotiations over a 25% country-specific tariff that has been suspended until July 8.
Here's a look at what's going on: In the 1970s, South Korea's military leader president Park Chung-hee accelerated the country's heavy industry, designating sectors such as steel and shipbuilding 'strategically important' and rolling out state subsidies.
At the same time, POSCO was founded, now one of the world's largest steel producers and conglomerate Hyundai built its shipyard in southeastern Ulsan, which started to grow rapidly.
European rivals struggled to keep pace.
Sweden's Kockums Shipyard filed for bankruptcy in 1987 and in a symbolic shift of global shipbuilding power, Hyundai acquired its 140-meter (460-foot) Goliath crane for $1. It now towers over southern Ulsan.
In the 1990s and 2000s, South Korean shipbuilders such as Hyundai Heavy Industries and Samsung Heavy Industries ramped up investment in research and development, backed by generous government subsidies.
The country secured a competitive edge in high-value-added vessels, including liquified natural gas (LNG) carriers, very large crude carriers, and offshore platforms.
Now, South Korea ranks as the world's second-largest shipbuilding nation, trailing only behind China.
South Korea's exports hit a record high in 2024, with analysts pointing to shipbuilding as one of the key drivers.
The sector accounted for nearly 4% of total exports and grew by almost 20% from the previous year, reaching $25.6 billion.Shipbuilding directly employs around 120,000 workers or roughly 1% of the country's total workforce; with indirect employment significantly higher in industrial hubs like Ulsan.
Industry data shows so far this year that new orders have exceeded 13 trillion won ($9.4 billion).
In March, Hanwha Ocean secured a landmark $1.6 billion contract to build LNG carriers for Taiwan's Evergreen Marine, one of the largest single orders in the sector this year.
Trump has showed 'significant interest in South Korea-U.S. shipbuilding cooperation,' said South Korea's trade, industry and energy minister Ahn Duk-geun in April.
Like the Europeans, the U.S. shipbuilding industry has lagged behind South Korea and China, and as a result, the sector is seen as a 'highly important bargaining chip in trade negotiations,' he added.
At an APEC finance ministers' meeting in South Korea in May, U.S. Trade Representative Jamieson Greer met Chung Ki-sun, vice chair of HD Hyundai, the country's largest shipbuilder, before he met Seoul's top officials.
'South Korea's shipbuilding and defense industries see a window of opportunity,' said Kim Dae-jong, a professor at Sejong University.
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