Executive Summary
As geopolitical competition between China and the US intensifies, the national security priorities of the US state have often clashed with that of domestic US industrial groups. Whilst analysis of this clash has often focused predominantly on the semiconductor industry, a similar conflict is emerging over shipbuilding and the US Navy’s interest in utilising foreign shipyards to procure future ships. In particular, ongoing efforts by the Trump Administration to meet future fleet requirements and attract foreign investment through cooperation with foreign yards has prompted backlash from legislators, highlighting the continued importance of the political economy in debates over naval procurement.
Introduction – State of US Shipbuilding
The US shipbuilding industry has in recent decades faced a precipitous decline. At a time of growing naval competition with China, the US’s current global market share in commercial shipbuilding sits at only around 0.04 to 0.13 percent against China’s 46.6 percent share (Kim & Roll, 2025). Compared to China’s large state subsidised network of over 20 large shipyards and 140 dry docks, the US holds only eight shipyards capable of building vessels greater than 400 feet and only 22 shipyards with the drydocking capability able to repair such ships (The White House, 2026; Seavy, 2024). The US Navy has therefore become beset by long shipbuilding delays, with the time needed to build a Virginia-class submarine increasing from 68 months per boat to 85 months from 2019 (Graham, 2025).
Faced with a heavily deteriorated domestic shipbuilding industry, the US Navy has thus begun to consider utilising allied shipbuilding capacity as a stopgap measure. Korean yards in particular have been the focus of recent discussions and attention. Korea, a key US ally, has the second-largest shipbuilding industry globally, and its yards, owned by companies such as Hanwha Ocean and HD Hyundai Heavy Industries, have extensive experience in building Aegis-equipped destroyers and a wide variety of auxiliary vessels (Kim & Roll, 2025). It was for this reason that the Navy sought USD 1.85 billion in the Fiscal Year 2027 National Defence Authorisation Act (NDAA) to spend on the research and potential procurement of South Korean and Japanese destroyer and frigate designs (Takahashi, 2026). At the same time, the US Navy issued two RFIs to Korean yards to assess their capacity to construct both US destroyers and fleet tankers (Gossrow, 2026).
Analysis
Bridge Strategy
However, and most importantly, this interest in foreign procurement should not be understood as an attempt to permanently shift construction and maintenance abroad. The main focus of the Trump Administration’s American Maritime Action Plan remains the commitment to rebuilding the US’s domestic commercial and military shipbuilding capacity (The White House, 2026). The recent interest in leveraging foreign shipyards therefore remains subordinated to the wider goal of attracting investment and capital into US shipbuilding, doing so through the so-called “Bridge Strategy”.
This term refers to a procurement framework in which a foreign shipbuilder is allowed to construct and maintain US ships on the condition that said firm concurrently invests in US shipyards with the goal of eventually onshoring construction (The White House, 2026, p.8). Within this, the Navy’s explicit interest in procuring foreign ships is key. It produces a clear commercial incentive for foreign firms to front billions in US shipbuilding, doing so by giving foreign yards conditional market access to lucrative shipbuilding and maintenance contracts once reserved only for US yards. This new innovative contracting framework therefore serves to construct a viable pathway for foreign capital to invest in US shipbuilding, complementing the August 2025 trade deal between the US and South Korea which secured a sweeping industrial package that would see Korean yards invest USD 150 billion into their US equivalents (Yu, 2025).
Legislative Issues
This emerging investment partnership however has become threatened by Congressional legislative trends that undermine the very incentive structure that would have made it possible in the first place. Traditionally, attempts to procure warships from abroad have been hindered by the so-called “Byrnes-Tollefson Amendment” of the DOD Appropriation Acts of 1965 and 1968. This amendment explicitly prohibits the procurement of foreign-built vessels unless first waived by the US President for national security reasons, a waiver utilised once before by the White House to allow the Coast Guard to procure the first batch of Arctic Security Cutters from Finnish yards (Grabow, 2022; Lagrone, 2026). The current administration’s attempt to include funding for the study of foreign ships designs within the NDAA was widely understood as an attempt to push a new statutory authority that would bypass Byrnes-Tollefson in a similar fashion to the Arctic Cutters.
Yet, this loophole was closed on the 5th of June 2026 when Representative Jared Golden’s amendment to the NDAA passed the House Armed Services Committee by a vote of 44-12. This amendment added language to the NDAA which prohibited any funds authorised for the Navy from being utilised for the procurement of a “battleforce ship” from a foreign yard, reflecting the interests of local unions and American shipyards such as the Bath Iron Works located in Golden’s 2nd Maine district (Golden, 2026). The amendment therefore undermines the incentive structure that underpinned the Bridge Strategy, doing so by making it much harder to authorise the construction of vessels in Korean and foreign yards. Although the Senate Armed Services Committee has been more flexible, seeking to introduce an amendment that would allow the Pentagon to build up to two bulk fuel carriers and sealift vessels abroad, the Golden Amendment threatens to put a “de facto ceiling” on the expansion of US-Korean shipbuilding ties, introducing uncertainty and compliance risks for South Korean shipbuilders (Choi, 2026).
Conclusion
The Bridge Strategy illustrates the tension between an executive and state interested in pragmatic solutions designed to secure national security interests and a domestic industrial sector focused on protecting local labour and the existing industrial base. In the same way as semiconductor export controls evolved based on domestic distributive politics, US naval procurement must consider congressional trends and sectoral interests that limit its flexibility. With the NDAA yet to pass the Senate, just how high the “ceiling” of cooperation can go is yet to be determined.
Bibliography
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