U.S. Senate bill could open Navy work to South Korean shipbuilders
June 22 (Asia Today) -- A U.S. Senate defense bill could create new opportunities for South Korean shipbuilders by allowing the Navy to procure a limited number of support vessels from overseas shipyards.
The Senate Armed Services Committee approved its version of the fiscal 2027 National Defense Authorization Act on June 11 and sent the legislation to the full Senate for consideration.
The bill would authorize the procurement of up to two bulk fuel vessels and up to two strategic sealift vessels from foreign shipyards.
Foreign contractors would be required to invest in the U.S. maritime industrial base and transfer production capabilities and supply chains to the United States for subsequent vessels.
The provision marks a potential departure from longstanding U.S. restrictions on foreign construction of naval vessels. It is intended to address delays in Navy shipbuilding and insufficient capacity at domestic shipyards.
South Korean shipbuilders are considered possible beneficiaries because of their experience in constructing commercial vessels and naval support ships on schedule.
Hanwha Ocean has established an early presence in the United States through Hanwha Philly Shipyard, which Hanwha Ocean and Hanwha Systems acquired for $100 million in December 2024.
The Philadelphia shipyard has delivered about half of the large oceangoing commercial vessels built under the Jones Act since 2000.
Hanwha has also announced plans to invest $5 billion in the yard, expanding its docks, production facilities and annual shipbuilding capacity.
Hanwha Ocean has secured several maintenance, repair and overhaul projects involving U.S. Navy support ships. Hanwha's U.S. subsidiaries also received a subcontract in March to participate in concept design work for the Navy's Next Generation Logistics Ship program.
HD Hyundai Heavy Industries has expanded cooperation with Huntington Ingalls Industries, the largest U.S. military shipbuilder, as it seeks additional work involving naval maintenance and logistics vessels.
Samsung Heavy Industries is also participating with U.S. partners in design work related to future logistics vessels.
A defense industry specialist at a major South Korean law firm, who requested anonymity, said the Senate provision could provide opportunities while creating legal and investment risks.
The specialist said Korean companies would need to prepare for requirements involving U.S. investment, technology transfers, local production and supply-chain development.
The measure could also add momentum to South Korea's efforts to negotiate a reciprocal defense procurement agreement with the United States.
Such agreements allow the United States and partner countries to reduce some procurement barriers and treat eligible products from participating countries more favorably in Defense Department contracting.
South Korea has a reciprocal quality-assurance agreement with the United States but is not currently listed among the countries that have reciprocal defense procurement agreements with the Defense Department.
An agreement could improve South Korean companies' access to U.S. defense contracts, but negotiations have not been completed.
The Senate bill must still pass the full Senate and be reconciled with the House version before it can be sent to the president. Its foreign shipbuilding provisions could be revised or removed during that process.
South Korean industry officials nevertheless view the committee's action as evidence that Washington is becoming more receptive to cooperation with allied shipbuilders as it seeks to rebuild U.S. naval and commercial shipbuilding capacity.
-- Reported by Asia Today; translated by UPI
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This story was originally published June 22, 2026 at 5:04 PM.