South Korea has agreed to invest $150bn into a dedicated US shipbuilding revitalisation fund, as part of a $350bn bilateral trade agreement signed Wednesday in Washington.
The move—touted as the largest Korean industrial investment in US history—aims to inject new life into America’s struggling shipyards while simultaneously granting Korean shipbuilders a critical foothold in the world’s largest defence market.
Announced just ahead of an August 1 tariff deadline, the agreement includes the creation of a Make American Shipbuilding Great Again initiative, which will channel Korean capital into the construction of new commercial and naval vessels on US soil, as well as the production of shipbuilding equipment and systems and maintenance, repair, and overhaul (MRO) for US fleets.
The $150bn shipbuilding component will be part of the broader $350bn investment package, which also spans sectors such as semiconductors, EV batteries, biotech, and clean energy. In exchange, the US has agreed to cap reciprocal and auto tariffs at 15%, levelling the playing field for Korean exports.
The US struck a similar deal with Japan – including its shipyards – earlier this month.
South Korean president Lee Jae-myung, celebrating the outcome, stated on social media: “With this agreement, the government has eliminated uncertainty in the export environment and, by matching the US tariffs to be lower or at the same level as major competitor countries, has created conditions for us to compete on equal or superior terms with other major countries.”
Presidents Lee and Trump will meet within the next two weeks to finalise and fine-tune the trade agreement.
Shares of leading Korean shipbuilders Hanwha Ocean and HD Hyundai Heavy Industries rallied Thursday in Seoul, buoyed by optimism that the agreement will fast-track Korean participation in US maritime programs.
Top executives from Korea’s major conglomerates, including Hanwha vice chairman Kim Dong-kwan, Samsung’s Lee Jae-yong, and Hyundai Motor’s Chung Euisun, were in Washington during negotiations.