South Korea Gets Ready to Roll Out "MASGA" Shipbuilding Investments

South Korea's government has convened a task force of representatives from the "Big Three" Korean shipbuilders to implement a newly-agreed program of investments in American shipbuilding. Under a proposal dubbed "Make America Shipbuilding Great Again," or MASGA, Korea has pledged to invest a total of $150 billion in the U.S. shipbuilding sector, as part of a comprehensive trade deal. In return, the White House has agreed to lower the tariff rate on Korean cars and other goods to 15 percent, and to let Seoul keep certain trade barriers on agricultural products.

HD KSOE, Hanwha Ocean and Samsung Heavy Industries have joined forces with Korea's Ministry of Trade, Industry and Energy to set up a task force on U.S. shipbuilding investment. The ministry told Korean media that one executive and one staff-level employee from each of the major conglomerates would be involved.

According to Business Korea, the public-private task force will talk over possible investment prospects, including the purchase of existing shipyards, construction of new greenfield shipyards in the U.S., workforce development projects, and opportunities for bidding for Navy repair work. Previous reporting suggests that new construction and repair work for government clients will be the primary areas of focus for Korean investors, with possibilities for commercial work.

Hanwha Ocean already has one foot on American soil through the acquisition of Hanwha Philly Shipyard late last year. Its investments in Philadelphia reportedly played a role in influencing senior American officials in favor of the deal, Korean media reported last week. Special red "MASGA" baseball hats for White House decisionmakers also played a supporting role, Korean presidential chief of staff Kim Yong-bum told KBS over the weekend.

"Considering President Donald Trump’s preference for golf and his fondness for red hats, we decided on the current design for production," a trade ministry official told Business Korea.

The alliance will have to contend with a persistent shortage of industrial labor in the United States, which has been a major factor in delayed shipbuilding progress at existing U.S. shipyards. Korean yards have a similar deficit, which they have resolved in part by recruiting immigrant workers to come to Korea on temporary visas, particularly from Southeast Asia.

While it could prove politically difficult to bring Thai or Vietnamese shipyard workers into the U.S., there is another option. Korean authorities have proposed a variety of "joint" shipbuilding arrangements to co-produce ships in both South Korea and in the United States. For defense shipbuilding, the Trump administration's most pressing need, current U.S. law might prohibit this arrangement: the Tollefson-Byrnes Amendment restricts U.S. naval shipbuilding to American shipyards. To lift this restriction, Sen. Mike Lee has introduced the Ensuring Naval Readiness Act, which would open up U.S. naval shipbuilding to foreign allies; the bill has one cosponsor and has been awaiting action from the Armed Services Committee since February.