Last month, media reports from different parts of the globe focused on a key agreement. South Korea has agreed to put in $150 billion into a dedicated US shipbuilding fund, as part of a broader $350 billion bilateral trade agreement signed recently.
This announcement is going to channel South Korean capital into the construction of commercial and naval vessels on US soil, in addition to the production of shipbuilding equipment and maintenance, repair and more for US fleets, according to Splash247.
South Korean firms expecting better foothold in US shipbuilding
South Korea’s $150 billion support for US shipbuilding has been routed as the largest Korean industrial investment in US history. It is aimed at solidifying the US’s struggling shipyards and, simultaneously, helping Seoul get a foothold in one of the largest defence markets globally.
This critical component is part of the broader $350 billion package, spanning a number of important sectors such as semiconductors, electric vehicle (EV) batteries, biotechnology and clean energy. You can expect a more fine-tuned agreement in the near future.
In exchange, the US has agreed to cap reciprocal and auto tariffs at 15%, offering better market conditions to Korean exports. It should also be noted here that the US and Japan struck a similar agreement, including shipyards, just a short time back last month.
Donald Trump going big on US shipbuilding industry
The $150 billion capital is going to offer a “solid support” for South Korean companies entering the US shipbuilding industry, South Korean President Lee Jae-myung noted in a Facebook post. In this industry, Korean firms are second only to China in global market share.
The other deal featuring the US and Japan, also finalized in July, is going to see the creation of a $550 billion fund to be put in a range of projects, such as the construction and modernisation of US-based shipyards, reported South China Morning Post.
