US Shipbuilding Gets a Lifeline: Korean Tech & a Century-Old Law Face Off
PHILADELPHIA, PA – August 26, 2025 – The launch of the ‘State of Maine,’ the third of five National Security Multipurpose Vessels (NSMVs), isn’t just a shipbuilding event; it’s a symbol of a dramatic shift in US maritime strategy. Today’s naming ceremony at Hanwha Philly Shipyard marks the beginning of a massive, $150 billion collaboration between the US and South Korea aimed at rescuing a struggling American shipbuilding industry. But the success of this ambitious project hinges on a controversial piece of legislation: the Jones Act.
A $150 Billion Bet on Korean Expertise
For decades, the US shipbuilding industry has been losing ground, particularly to China. In 2023, China launched 1,749 ships while the US completed a mere 5. The US merchant fleet, with only 178 vessels, pales in comparison to China’s 7,000+. This isn’t just an economic issue; it’s a national security concern. As the article points out, a robust shipbuilding base is critical for maintaining a powerful Navy. The Korea-US Shipbuilding Cooperation Initiative, dubbed ‘MASGA,’ is a direct response to this crisis, leveraging Korean technology and capital to revitalize American shipyards.
The Jones Act: Shield or Shackle?
The core of the problem, and a key factor in the MASGA partnership, is the Merchant Marine Act of 1920, better known as the Jones Act. This law mandates that all goods transported between US ports must be carried on US-flagged vessels, built in the US, owned by US citizens, and crewed by Americans. While intended to protect domestic industry, it’s created a paradoxical situation: American shipbuilders enjoy stable profits *despite* being significantly less efficient and more expensive than their competitors. Construction costs are two to three times higher than in Korea, and delivery delays are commonplace.
The Jones Act, in effect, guarantees a market for US-built ships, but it also stifles competition and innovation. It’s a protectionist measure that has, arguably, made the US shipbuilding industry reliant on artificial support rather than genuine competitiveness. This echoes a similar situation in 17th-century England, where Navigation Acts initially bolstered British maritime power but ultimately became a drag on economic growth.
Lessons from the British Empire: From Protection to Free Trade
History offers a compelling parallel. England’s Navigation Acts, enacted starting in 1651, mirrored the Jones Act in their protectionist intent. They fueled the growth of the British Empire for a time, but as the Industrial Revolution took hold, these restrictions became counterproductive. Increased costs and limited competition hampered British trade. The eventual abolition of the Navigation Acts in the 19th century unleashed a wave of innovation and propelled Britain to become a global economic powerhouse. As Richard Cobden famously stated, “The world is no longer a sea of pirates.”
The US at a Crossroads: Liberalization or Continued Isolation?
Today, the US faces a similar choice. Senator Mike Lee recently proposed the ‘US Maritime Transport Liberalization Act,’ arguing that the Jones Act is “an anachronistic regulation” that burdens American families and businesses. The Shipbuilding Association of America (SCA) fiercely defends the Jones Act, emphasizing its importance for national security and American jobs. However, the reality is that the US shipbuilding industry needs to evolve to compete in a global market.
What This Means for Korea – and the Future of Shipbuilding
The MASGA project presents a unique opportunity for Korea. Korean shipbuilders, renowned for their expertise in high-value vessels like LNG carriers, stand to benefit from stable orders in a protected market. However, there’s a risk. The transfer of Korean technology and facilities to the US could weaken Korea’s own industrial base and discourage further innovation. Korea must strike a delicate balance: leverage the benefits of the MASGA partnership while continuing to invest in cutting-edge shipbuilding technology.
The long-term success of the US-Korea shipbuilding collaboration, and the future of the American maritime industry, may ultimately depend on whether the US can learn from history and embrace a more open and competitive approach. Just as Britain thrived by abandoning protectionism, the US may need to reconsider the Jones Act to unlock its full shipbuilding potential. The ‘State of Maine’ is more than just a ship; it’s a test case for a bold new strategy – and a reminder that true maritime power isn’t built behind walls, but on the open sea of innovation.
