"US Defense Department May Build Warships in South Korea, Japan With $2.8 Trillion Budget Request to Congress"

OMB Official: "Discussions Underway with Hanwha, HD Hyundai, and Samsung Heavy Industries"

A White House official has stated that the US Department of Defense's request to Congress for $1.85 billion (approximately 2.8057 trillion won) in Navy research and development funding, included in the 2027 budget proposal, may be used not only as simple research funds but also to finance the construction of warships in South Korea or Japan.

According to US media outlet Breaking Defense on June 1 (local time), an official from the White House Office of Management and Budget (OMB) said, "No one spends $1.85 billion just on research. This funding is intended for asset procurement," adding, "The OMB director has already clarified this, and I am stating it again. We are seriously considering ways to procure assets as quickly as possible."

US Department of Defense building. Photo by Reuters Yonhap News

He said, "Depending on the manufacturer, this budget could fully purchase a frigate. The same applies to a cruiser or a destroyer," and added, "Looking at the average construction cost for destroyers in South Korea and Japan, $1 billion is actually quite low. South Korea and Japan are building advanced surface combat ships at much lower costs than the United States."

The OMB is reviewing a plan under which the hull, machinery, and electrical structures of up to two warships would be produced in South Korea or Japan, while US defense companies would lead the integration of combat systems. The US administration previously applied a similar model when signing an icebreaker construction contract with Finland.

The official said, "These ships could be delivered to the United States, and at the same time, parent shipbuilding companies would invest in the US according to the contracts," noting that options being discussed include acquiring and modernizing existing shipyards or establishing new shipyards in the country. He continued that discussions are currently underway with companies such as Hanwha, HD Hyundai, and Samsung Heavy Industries from South Korea, as well as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, and Japan Marine United (JMU) from Japan. While initially shipbuilding tasks may be entrusted to allied countries like South Korea and Japan, the long-term goal is to strengthen the United States' own capabilities through major investments by allied companies in the US.

Previously, the White House stated in its 'America's Maritime Action Plan' released in February that it is necessary "to reduce reliance on unreliable suppliers through strengthened cooperation with allies and partners," and pledged to "continue historic cooperation with South Korea and Japan on the revitalization of US shipbuilding." In the action plan, the White House proposed the so-called 'Bridge Strategy,' which would allow foreign shipbuilders that acquire US shipyards or partner with local companies to construct some initial contract volumes in their home countries while building up manufacturing capacity in the United States.

Under current US law, warships must be constructed in US shipyards. To build them abroad, a presidential waiver from the law is required. For this reason, the US military has mainly collaborated with foreign companies only for the maintenance and repair of its own warships.

However, if the US government places orders for warship construction at overseas shipyards, backlash from the US shipbuilding industry is expected. This is also likely to make it difficult to persuade Congress. The media outlet reported that during a recent hearing attended by US Navy leadership, lawmakers expressed skepticism about the idea of involving foreign companies to supplement the production capacity of the US shipbuilding industry.

This content was produced with the assistance of AI translation services.