South Korea’s shipbuilding industry continues to seek opportunities to build business through cooperation while taking advantage of the U.S.’s efforts to restore capabilities and address Chinese domination in shipbuilding. On Friday, May 16, two of the country’s largest shipbuilders had the opportunity to meet with U.S. Trade Representative Jamieson Greer while he was in the country for a meeting of Asian trade ministers.
Greer was part of the U.S. delegation attending the Asia-Pacific Economic Cooperation (APEC) two-day conference on South Korea’s resort island of Jeju. The ministers from the 21 member nations were in attendance while the conference also brought business leaders together. It also provided an opportunity for South Korea to advance its efforts to reach a new trade agreement with the United States.
The country’s interim leader met with Greer to discuss trade issues and the need to reach a new trade agreement. The government is using the opportunities with the shipbuilders as a key chip in the negotiations noting that South Korea is second only to China in shipbuilding. Both HD Hyundai and Hanwha Ocean have already registered for a U.S. Navy maintenance program for auxiliary ships, and South Korea highlights its capabilities both in building U.S.-designed warships and large commercial ships.
Complicating the trade talks are the pending elections in South Korea scheduled for June 3 to select a new prime minister after the turmoil of the past few months. Also, reports said the Trump administration may be trying to link the cost of maintaining 28,500 U.S. troops stationed in South Korea to the trade discussions.
The Executive Vice Chairman of HD Hyundai, Chung Kisun, and Hanwha Ocean CEO Kim Hee-chul were both able to conduct meetings with Greer to highlight their shipbuilding strategies, and in the case of HD Hyundai, it also played to U.S. interests highlighting its capabilities to manufacture port cranes. HD Hyundai reports that during its meeting, Chung introduced its affiliate HY Hyundai Samho and its crane manufacturing capability. He proposed that they could help to strengthen cooperation between the countries and diversify and stabilize the U.S. port equipment supply chain. Greer’s team has proposed tariffs against Chinese-built cranes as a follow-up to the “spy cranes” allegations that assert China could watch and control U.S. ports with its cranes.
HD Hyundai reports that Chung told Greer, “We deeply appreciate the United States’ commitment to rebuilding its shipbuilding industry. HD Hyundai stands fully prepared and willing to contribute wherever our capabilities are needed.”
The company also highlighted to Greer ongoing collaboration with U.S. defense shipbuilder Huntington Ingalls Industries and proposed concrete areas of cooperation, including joint technology development, shipbuilding cooperation, and skilled workforce training programs.
Hanwha Ocean reports they discussed a wide range of cooperation measures in the shipbuilding industry with Greer including its strategy for supply chain stability and strengthening industrial competitiveness, focusing on expanding the shipbuilding production base and technology transfer in the U.S. Hanwha Ocean highlighted that it is planning to apply the smart production system of its Geoje plant to its recently acquired Philly Shipyard in the U.S. They also told Greer that it is also considering establishing additional production bases in the U.S.
The South Korean shipbuilders have been reaching out to the U.S., including hosting tours of their facilities with leaders from the Navy and the current and former U.S. Secretary of the Navy. Today’s meeting was reported to be the first “official dialogue” for the South Korean shipbuilders with the U.S. Trade Representative. Recently, reports have said the industry is already receiving strong inquiries since the USTR released its policy for port fees on Chinese-built ships and Chinese-built cargo cranes.
South Korea, like Japan, is reported to be looking to capitalize on the Trump administration’s interest in shipbuilding in its larger trade deal in response to Trump’s tariffs. South Korea says it agreed to a tentative goal of having a trade agreement with the U.S. by early July, but it may be slowed by the current elections.
