U.S. directive calls for foreign building of Navy vessels

FORUM Staff

The United States will permit foreign shipbuilders to construct up to two military vessels in their shipyards for delivery to the U.S., according to an August 2026 national security memorandum.

The strategy, which potentially ends a longtime ban on foreign construction of U.S. Navy vessels, seeks to quickly address gaps in U.S. Navy capacity while restoring the country’s domestic shipbuilding sector.

“The lack of capacity and competition among shipbuilders has resulted in large backlogs of orders across six major Navy shipbuilding programs and a commercial shipbuilding sector that is not globally competitive. An atrophied shipbuilding industrial base, coupled with diminished adjacent supplier bases, has expanded delays and increased costs,” states the memorandum signed by U.S. President Donald Trump. “The Department of War shall restore both capacity and competition to the maritime industrial base as it expands our naval force structure.”

To qualify, foreign suppliers must build a U.S. shipyard or assume ownership of an existing shipyard and hire and train U.S. workers. The policy essentially calls for expanding the “Finland model,” approved in October 2025 to build the U.S. Coast Guard’s Arctic Security Cutters. The initial vessels are to be built in Finland by foreign yards with subsequent vessels constructed domestically.

The directive covers three types of ships: surface combatants, consolidated cargo replenishment tankers and roll-on/roll-off vessels, which can transport cars, trucks, semi-trailers and heavy machinery.

The strategy follows the July 2026 opening of a cooperation center in Washington, D.C., to advance the U.S.’s shipbuilding partnership with the Republic of Korea (ROK). The partnership center serves as the hub for ROK investment, U.S. shipyard modernization, workforce development and joint research. Seoul has pledged to invest $150 billion in U.S. shipbuilding with the cooperation center connecting ROK shipbuilders with U.S. shipyards, technology companies and researchers.

Analysts say the new outsourcing plan could benefit the ROK’s Hanwha Group, which acquired Philly Shipyard in the U.S. state of Pennsylvania in 2024 and pledged $5 billion to expand it.

​“For South Korea’s defense-industrial base, the directive transforms a historic military alliance into a deeply integrated industrial partnership,” retired ROK Army Lt. Gen. Chun In-Bum, a director and auditor with South Korea-based HJ Shipbuilding & Construction, told FORUM. “Korean industry leaders must continuously demonstrate that ROK industrial participation strengthens American capabilities rather than displacing domestic jobs.

“Ultimately, uniting cutting-edge American systems engineering with South Korean shipbuilding productivity creates a seamless, combined industrial network that serves as a vital force multiplier for deterrence and maritime stability across the Western Pacific.”