US, South Korea reach $350bn investment deal with shipbuilding focus
WASHINGTON and Seoul have agreed on a $350bn investment framework that allocates $200bn in cash investments to the US and $150bn to a shipbuilding co-operation initiative, the South Korean government said on Tuesday.
The agreement was reached at the Korea-US summit on October 29 during US President Donald Trump’s visit to the Asian country for the Asia-Pacific Economic Cooperation meeting in Gyeongju.
The $150bn will be used to fund the “Make American Shipbuilding Great Again” initiative, under which South Korea will take the lead.
In a briefing on the results of the summit, South Korea’s chief policy advisor Kim Yong-beom said: “The two countries agreed that the MASGA initiative will be led by Korean companies, and the agreement covers investments and guarantees.”
He added: “This agreement includes ship financing, which provides long-term funding for the construction of new vessels. This reduces the burden on our foreign exchange market and increases the likelihood of our companies securing shipbuilding orders.”
Until the recent summit, the US had insisted that the $350bn investment in the US, including the $150bn pledged through the MASGA initiative, would be made up entirely of cash investments.
However, the detailed agreement reached this time recognises government-backed financing solely for investments in shipbuilding co-operation.
The day after the summit, Trump announced that he had approved South Korea’s construction of a nuclear-powered submarine, expected to be built at Hanwha’s shipyard in Philadelphia.
“Our Military Alliance is stronger than ever before and, based on that, I have given them approval to build a Nuclear Powered Submarine, rather than the old fashioned, and far less nimble, diesel powered Submarines that they have now,” the president wrote on Truth Social during his visit to South Korea.
“South Korea will be building its Nuclear Powered Submarine in the Philadelphia Shipyards, right here in the good ol’ USA. Shipbuilding in our Country will soon be making a BIG COMEBACK.”
Philly Shipyard was renamed Hanwha Philly Shipyard after the US shipbuilder was acquired by the South Korean conglomerate Hanwha Group from Aker for $100m in December 2024.
In August of this year, Hanwha Group announced that it would invest $5bn in expanding its shipyard.
In October, in response to US trade measures against China’s shipbuilding industry, the Chinese government banned five US subsidiaries of Hanwha Ocean, including Hanwha Philly Shipyard, from doing business with Chinese companies.
When contacted by Lloyd’s List, Hanwha Ocean said in a written statement: “We support the significant and crucial decisions made by the presidents of South Korea and the US. We will fully co-operate with both governments. Hanwha is ready to contribute its cutting-edge shipbuilding technology.”
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