The United States faces growing pressure to rebuild maritime industrial capacity. Naval shipbuilding programs continue to struggle with long production timelines, workforce shortages, supplier fragility, acquisition instability, and legal barriers. Maintenance backlogs remain significant. Geopolitical competition is also placing greater emphasis on sealift, sustainment, and the ability to generate maritime capacity at scale in a prolonged contingency. These pressures have renewed interest in how U.S. allies and partners might contribute to the maritime industrial base.
South Korea is one of the world’s leading shipbuilding nations, with large-scale commercial production, as well as extensive experience in ship design, yard management, modular construction, supplier integration, and increasingly digitalized manufacturing. As a result, U.S.-ROK cooperation in shipbuilding and maritime innovation has become a more prominent subject of policy discussion.
RAND’s recent conference on U.S.-ROK Cooperation on Shipbuilding and Maritime Innovation reinforces that the central issue is not whether cooperation makes strategic sense. What matters more is how to structure cooperation so that it strengthens U.S. maritime industrial capacity, makes commercial sense for Korean shipbuilders, and survives the political and regulatory constraints on both sides. The harder question: What forms of cooperation are compatible with U.S. defense and industrial priorities and commercially viable for Korean shipbuilders? Balancing short-term needs against long-term industrial priorities is also a challenge.
The United States is simultaneously pursuing multiple objectives in allied shipbuilding cooperation that do not clearly align. One objective is to increase maritime capacity in the near term. This includes addressing production bottlenecks and maintenance backlogs. A second objective is to rebuild domestic industrial resilience over the long term by strengthening shipyards, supplier networks, labor pipelines, and production know-how inside the United States. A third objective is to preserve sovereign control over critical defense capabilities, technologies, and wartime production. All this must occur within political, legal, and budgetary constraints shaped by Congress, labor interests, and local industrial constituencies.
These objectives might reinforce each other in some cases, but they also come into tension. Measures that provide near-term capacity may not always build long-term domestic resilience. Efforts that maximize domestic control may not produce capacity quickly. And policies designed to protect U.S. industry may, in some cases, limit the use of allied capabilities that could offer additional capacity in the short run. This tension was a central theme of the RAND conference. Discussions focused on trade-offs: What kinds of cooperation would help solve immediate problems? Which forms would support the domestic industrial base over time? And where do political or regulatory barriers limit the available options?
Measures that provide near-term capacity may not always build long-term domestic resilience.
The Core Problem Is Broader Than Yard Capacity. It’s Performance
The most immediate constraints are not only physical infrastructure but the underlying industrial system: workforce shortages, especially in the skilled trade and mid-level supervisory ranks; weak or fragile ecosystems; production inefficiencies; and acquisition practices that often generate design instability and schedule delays. In many naval programs, construction begins before designs are sufficiently mature, producing cascading effects on cost and productivity.
In Korean shipbuilding, firms generally stabilize design early and bear greater responsibility for integration and execution. The U.S. Navy strives to incorporate the latest technology and combat systems in each of its ship classes. With extended design timelines and pressure to begin construction, design changes are often continuously adopted well into production. Government oversight is extensive, typically not in ways that improve productivity. This is a significant mismatch. Without changes in U.S. program structure or design discipline, Korean firms’ comparative advantages may be undermined.
Some discussion at the RAND conference cited examples such as the Littoral Combat Ship, the Expeditionary Fast Transport, and the Constellation-class frigate as reminders that foreign design lineage or allied participation does not guarantee successful outcomes. In several cases, adapted designs were heavily modified in the U.S. system to accommodate Navy-driven requirements. This increases risks and reduces the benefits of using an established baseline.
This has two implications for cooperation with allies. First, external industrial capacity alone will not solve U.S. shipbuilding problems if domestic bottlenecks in design, management, workforce, and supply chains remain unaddressed. Second, the most useful contributions from allies may not be limited to ship output itself. Process discipline, production methods, workforce development models, supplier integration, and digital tools may matter as much as physical construction in strengthening U.S. performance over time.
From a U.S. policy perspective, that distinction is important. If cooperation is framed primarily as overseas substitution for domestic capacity, it is likely to face political resistance and may do little to strengthen the U.S. industrial base in the long run. If instead cooperation is structured to improve domestic production capability, it may not produce the near-term output that is needed.
The Near-Term Need Is Real, but So Is the Political Constraint
The United States wants to increase maritime capacity more quickly, but it also wants to rebuild that capacity domestically. These goals are not always in sync.
Some argue that if the objective is to “pulse” additional ships into the fleet in the near term, then allied or foreign yards may be the only practical option for certain platforms. Others argue that Congress is less likely to accept large-scale offshore construction of combat-relevant ships, even if it would accelerate delivery. The short-term desire to get more ships quickly and the long-term commitment to domestic shipbuilding seem to be misaligned in significant ways.
That political constraint was reflected in repeated references to the proposed Golden Amendment in the FY2027 National Defense Authorization Act, which would restrict foreign construction of U.S. military vessels and major hull or superstructure components. Whether or not the provision is enacted in its current form, it captures a broader congressional concern: U.S. shipbuilding is not only an industrial issue but a sovereign capability one as well. This concern is especially addressed in segments of the fleet tied to combat power and strategic deterrence. This suggests that allied cooperation models will need to fit within a political framework that strongly favors domestic industrial rebuilding.
A broader congressional concern is that U.S. shipbuilding is not only an industrial issue but a sovereign capability one as well.
Demand Signal, Risk, and the View from Industry
From the Korean industry perspective, demand predictability emerged as a central issue. Meaningful industrial participation in the United States would require substantial commitments: facilities, supply chains, trained personnel, management systems, and in some cases technology protection arrangements. Korean firms are not likely to make such investments based only on strategic rhetoric. They will look for evidence that demand is stable, policy direction is durable, and the business case is credible.
One lesson learned from the RAND conference was that Korean firms already have order books extending several years into the future and are not under pressure to enter lower-margin, higher-risk business lines unless conditions justify doing so. Uncertainty is not limited to overall demand. It includes the volatility of U.S. surface ship acquisition plans, unclear program requirements, the risk of political transitions, and the challenge of building supplier ecosystems in a high-cost environment.
It is also important to note that the issue is not only U.S. demand: Korean shipbuilders themselves face long-term questions about future market conditions and labor constraints, creating incentives to globalize and diversify. That suggests some areas where U.S. and ROK interests may align—but not at any price. If the United States wants allied firms to invest in ways that support domestic industrial revitalization, it will need to improve the quality of its demand and address barriers to industrial participation.
A More Practical Starting Point: Auxiliaries, MRO, and Industrial Enablers
Large-scale foreign construction of battle force ships remains politically difficult and, in many cases, operationally sensitive. A key takeaway from the RAND conference was the identification of a limited set of areas where U.S. need is high, barriers are lower, and cooperation might also support domestic rebuilding.
Auxiliary ships and strategic sealift vessels are frequently cited as plausible candidates. These platforms are urgently needed and less politically sensitive than frontline combatants. They could serve as pilot programs, allowing the United States and its allies to test cooperation models without forcing immediate resolution of the most sensitive sovereignty and technology issues.
Maintenance, repair, and overhaul (MRO) also emerged as a serious area for cooperation. U.S. sustainment backlogs are significant, and legal restrictions on foreign MRO support are less stringent for auxiliary vessels than combatants. There exist examples where MRO efforts on auxiliary ships have been completed in foreign yards, and this additional capacity could greatly help U.S. backlogs. It is important to emphasize industrial enablers rather than end items when the United States considers allied cooperation in shipbuilding. For example, workforce exchanges, supervisory training, supplier development, additive manufacturing, digital design tools, condition-based maintenance, and digital twins may be less visible than ship construction, but they may align more directly with the long-term goal of improving U.S. industrial performance.
It is important to emphasize industrial enablers rather than end items when the United States considers allied cooperation in shipbuilding.
Policy Priorities for a U.S.-Aligned Cooperation Agenda
If U.S.-ROK shipbuilding cooperation is to support U.S. government and Navy priorities, several principles should guide policy.
Start with Clearly Defined U.S. Objectives
Policymakers should distinguish among near-term fleet support, long-term industrial revitalization, sovereign production needs, and alliance management. Cooperation that addresses one objective may not address another.
Focus First on Lower Friction, Higher-Value Areas
Auxiliaries, strategic sealift, MRO, supplier partnerships, workforce development, and selected component or block production appear more consistent with both operational need and political feasibility than large-scale offshore construction of battle force ships.
Use Cooperation to Improve Domestic Performance, Not Only Add External Capacity
The most useful allied contribution may be in transferring production methods, training models, supplier integration, and digital processes that help strengthen U.S. shipbuilding over time.
Improve Demand Predictability
If the United States wants sustained allied industrial participation, it will need more credible procurement signals, greater consistency in shipbuilding plans, and better alignment across Congress, the Navy, and the executive branch.
Address Enabling Conditions
Visa rules for skilled personnel, legal clarity for technology protection, and practical support for supplier localization and labor engagement will matter if industrial cooperation is expected to move beyond concept.
Keep Political Sustainability in View
Cooperation that is perceived as bypassing U.S. labor or weakening domestic yards is unlikely to endure. Cooperation that helps build domestic jobs, industrial capability, and production resilience is more likely to attract support.
Source: www.rand.org
