House, Senate defense bills diverge on South Korean shipbuilding role

House amendment would bar Navy funds for foreign-built battle force ships

The House Armed Services Committee approved its version of the defense authorization bill on June 5, including an amendment introduced by Rep. Jared Golden, D-Maine, that would prohibit the Navy from using funds to procure battle force ships and major components built at foreign shipyards. Federal law already generally bars the Navy from obtaining major hull and superstructure components from overseas yards, but the amendment would further restrict the remaining exceptions, according to the committee’s legislation.

The Senate Armed Services Committee adopted a different approach in its version on June 11, proposing to allow the Pentagon to procure up to two bulk fuel vessels and two strategic sealift vessels from foreign shipyards. The Senate proposal creates a limited exception for auxiliary vessels built by companies in allied countries.

Both versions must pass their respective chambers and be reconciled before the final bill becomes law. The outcome is expected to be a major factor in determining the direction of shipbuilding cooperation between South Korea and the United States.

The congressional debate reflects competing priorities, according to lawmakers and analysts. The United States seeks to protect and rebuild its domestic shipbuilding industry, which produced about 0.1% of global commercial shipbuilding output in 2024, compared with more than 53% for China, according to the Center for Strategic and International Studies. A Government Accountability Office review found that 37 of the 45 battle force ships under construction examined were experiencing schedule delays.

The Trump administration has pursued a maritime action plan intended to rebuild domestic production while exploring a “bridge strategy” involving investments and technical support from allied shipbuilders, administration officials said. South Korean companies have accelerated efforts to establish themselves in the U.S. market.

Hanwha Ocean acquired a shipyard in Philadelphia and announced plans for large-scale investment in its facilities. HD Hyundai Heavy Industries has expanded cooperation with HII, the largest U.S. military shipbuilder, on auxiliary vessels, commercial ships, artificial intelligence and automated production technology. Samsung Heavy Industries and South Korean ship design company DSEC are working with General Dynamics NASSCO on U.S. commercial and naval programs, including the Navy’s next-generation logistics ship.

Expectations for broader cooperation increased after President Lee Jae Myung said President Donald Trump asked during their meeting at the Group of Seven summit in France whether South Korea could rapidly build 10 vessels for the U.S. Navy. Lee said South Korea was prepared to help. The conversation took place during the leaders’ summit, not during a telephone call as initially described in some reports, according to Lee.

Industry officials said the House proposal would have little direct effect on maintenance, repair and overhaul work because it primarily addresses the construction and procurement of new vessels. HD Hyundai Heavy Industries said the proposed restriction would not change the legal conditions governing the maintenance projects it is pursuing. Hanwha Ocean is also expected to face limited immediate effects because its ownership of Hanwha Philly Shipyard gives it a production base inside the United States.

The broader policy direction, however, could require South Korean companies to increase their U.S. manufacturing investments and secure more skilled American workers, industry officials said. Hanwha’s Philadelphia facility may provide it with an advantage if Congress adopts stricter domestic construction requirements. HD Hyundai and other Korean companies could expand partnerships, investments or production arrangements with U.S. yards.

“The central issue is not maintenance work but how far the United States will allow allies to participate in the construction of American naval vessels,” an industry official said. “The final legislation could significantly affect Korean companies’ U.S. investment strategies and the future direction of South Korea-U.S. shipbuilding cooperation,” the official said.