Jordan Jang | Apil 5, 2026
“Make American Shipbuilding Great Again” (MASGA), initiated by the South Korean government, seeks to restore U.S. maritime industrial capacity via South Korean investment in U.S. shipbuilding. MASGA reflects a strategic recognition. While the United States retains advanced naval shipbuilding capabilities, it has largely lost competitive commercial shipbuilding capacity, making industrial revitalization a national priority. In 2025, China accounted for 75 percent of orders for new commercial ships, South Korea accounted for 19 percent, and the U.S. accounted for only 0.2 percent.
Recently, the Trump administration published “America’s Maritime Action Plan” outlining how it can rebuild America’s shipbuilding industry through a combination of federal funds, establishing a universal fee on any foreign-built vessels, and leveraging allied partnerships with countries like South Korea and Japan. Most notably, the South Korean shipbuilding industry has committed about $150 billion towards revitalizing the U.S. shipbuilding industry.
But questions remain on how the U.S. can integrate South Korean shipbuilding capacity while adhering to federal law. Attracting South Korean shipbuilders to rebuild the U.S. fleet runs directly into the territorial definition of “American-built” vessels under the Jones Act and the Buy American Act. Despite initial investment by companies like Hanwha Ocean in the Philly Shipyard, MASGA’s goal of rapidly revitalizing U.S. shipbuilding through cooperation with South Korea is constrained by existing U.S. maritime and procurement laws, which impose strict domestic-build requirements that can limit the integration of Korean shipbuilding capacity.
Assessing South Korean Shipbuilding Capacity:
South Korea is the second-largest builder of commercial vessels behind China, and is an emerging defense industry exporter for naval vessels. The South Korea-U.S. military alliance means that South Korea can play a key role in the Trump administration’s Maritime Action Plan. In fact, since 2024 the U.S. Department of Defense (DOD) has expanded the maintenance, repair, and overhaul (MRO) of U.S. Navy vessels in South Korean shipyards due to backlogs at U.S. shipyards. Moreover, the DOD’s (also referred to the Department of War) 2024 Regional Sustainment Framework states the need to establish MRO hubs “closer to the point of need,” which means that South Korea’s geographical proximity to China makes it an ideal location in maintaining wartime sustainment hubs for military operations.
Aerial view of Daewoo Shipbuilding & Marine Engineering in August 2017, CC BY-SA 4.0
In 2024, South Korean company Hanwha Ocean bought the Philly Shipyard in efforts to expand its global footprint while positioning itself as a potential partner to the MASGA initiative. The acquisition of Philly Shipyard transformed Hanwha into one of few Korean shipbuilding companies capable of constructing Jones Act compliant vessels and qualifying for domestic procurement under the Buy American Act.
However, some South Korean analysts are worried that Trump’s willingness to cooperate with its shipbuilding companies is mere “lip service.” There are three main concerns: (1) Congress has not allotted funding for any of the initiatives mentioned in the Maritime Action Plan, (2) American shipyards currently lack the capacity to absorb shipbuilding contracts in the short term, and (3) South Korean shipbuilding companies investing in the U.S. may not see meaningful financial returns in the near future. Even if companies like Hanwha manage to build ten vessels annually at the Philly Shipyard, Hanwha vessels built in South Korea will potentially be subject to a universal fee on foreign-built vessels from any nation entering U.S. ports. This fee would range from 1 cent/kilogram to 25 cents/kilogram, and would be assessed based on the weight of imported tonnage.
This initiative has also concerned China, who is alarmed by U.S. shipbuilding capacity as it implicates military capacity. China’s Ministry of Commerce announced sanctions against Hanwha and its subsidiaries, including Hanwha Philly Shipyard, Hanwha Ocean USA International, and Hanwha Shipping Holdings. Such sanctions, intended to counter US-South Korean cooperation, mean that these companies will not be able to do business with any organizations and individuals in China.
The Legal Framework
Several relevant statutes govern the revitalization of the U.S. shipbuilding industry. These include the Merchant Marine Act of 1920 (Jones Act) and the Buy American Act of 1933. Together, these laws reflect a consistent policy objective: maintaining a domestic maritime industrial base capable of supporting both commercial shipping and national defense. However, these statutes impose territorial restrictions that complicate efforts to integrate allied shipbuilding capacity into U.S. maritime policy initiatives such as MASGA.
The Jones Act
The Jones Act establishes cabotage rules governing maritime transportation between U.S. ports. The statute requires vessels engaged in transporting cargo from one U.S. port to another U.S. port to be U.S.-built, owned, and crewed. A vessel qualifies as “U.S.-built” only if its hull and superstructure are fabricated in the United States and the vessel is assembled in a domestic shipyard. Any substantial foreign involvement in construction, including foreign fabrication of any “structural part” of the ship can disqualify a vessel from Jones Act eligibility.
For MASGA, the Jones Act presents a structural constraint. Although South Korean shipbuilders possess world-leading commercial shipbuilding capacity, any substantial construction in Korean shipyards means that vessels cannot participate in U.S. domestic trade. Consequently, Korean shipbuilders seeking to participate in U.S. commercial shipbuilding programs must relocate production to the U.S. (Hanwha Ocean’s acquisition of the Philadelphia Shipyard illustrates this dynamic). However, given American shipbuilding capacity of fewer than five vessels a year, South Korean shipbuilders have little incentive, particularly in the short-term, to invest billions of dollars into U.S. shipyards when US production costs remain far higher than in Asia. The Jones Act’s domestic-build requirement therefore risks limiting the very cooperation MASGA seeks to encourage. Without stronger financial incentives, allied shipbuilders may view large-scale U.S. investment as commercially unattractive, slowing efforts to rapidly expand the U.S. commercial fleet.
Some policymakers have begun exploring legislative pathways to incorporate allied shipbuilding capacity without fully dismantling existing cabotage protections. For example, the Merchant Marine Allies Partnership Act would allow vessels built in certain allied shipyards, including those in South Korea and Japan, to qualify for limited exemptions from Jones Act restrictions. Proponents argue that such reforms would enable the United States to expand its commercial fleet more rapidly while countering China’s dominance in global shipbuilding.
The Buy American Act: Finding An Exemption under a Reciprocal Defense Procurement (RDP) Agreement
U.S. procurement rules also favor domestic production. The Buy American Act of 1933 requires federal agencies to prioritize the purchase of domestically manufactured goods when procuring products for government use. Within the Department of Defense procurement system, these domestic preference requirements are implemented through the Defense Federal Acquisition Regulation Supplement (DFARS). Under DFARS, certain allied countries with which the United States maintains Reciprocal Defense Procurement (RDP) Agreements are designated as “qualifying countries.” Defense products originating from these qualifying countries may be exempt from certain Buy American Act restrictions, allowing them to compete more easily for defense contracts.
However, South Korea is not currently designated as a “qualifying country” as it lacks an RDP Agreement with the U.S. As a result, Korean defense products generally remain subject to Buy American Act restrictions in U.S. defense procurement. This status limits the ability of Korean shipbuilders and defense contractors to directly supply vessels or components to the U.S. government unless production occurs within the United States. Therefore, negotiations for an RDP agreement could reduce regulatory barriers and incentivize South Korean shipbuilders.
Conclusion
MASGA reflects a growing recognition that rebuilding U.S. maritime industrial capacity is both an economic and strategic imperative. China’s dominance in commercial shipbuilding and the United States limited domestic production capacity have forced policymakers to reconsider how allies can contribute to revitalizing the American shipbuilding industry. South Korea’s globally competitive shipbuilding industry presents a natural partner in this effort, as demonstrated by investments such as Hanwha Ocean’s acquisition of the Philly Shipyard and the expanding role of Korean shipyards in maintaining U.S. naval vessels. Yet MASGA’s ambitions run directly into legal constraints designed to preserve a domestic maritime industrial base. The Jones Act’s strict definition of “U.S.-built” vessels and the Buy American Act’s procurement preferences significantly limit the ability of allied cooperation while disincentivizing allied shipbuilders to invest in U.S. shipbuilding.