Can Hanwha build Trump's golden armada? Legal barriers, poor U.S. infrastructure spark doubts.

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Can Hanwha build Trump's golden armada? Legal barriers, poor U.S. infrastructure spark doubts.

Published: 25 Dec. 2025, 17:40 Updated: 25 Dec. 2025, 18:08

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

Hanwha Philly Shipyard in Philadelphia [HANWHA OCEAN]

[NEWS ANALYSIS]

U.S. President Donald Trump has called on Hanwha Philly Shipyard to build a new class of frigates for the U.S. Navy, but unresolved regulatory hurdles and labor shortages may ultimately determine how deeply the Korean shipbuilder can participate in Trump’s vision of a “Golden Fleet.”

Trump’s mention of Hanwha on Tuesday in connection to the U.S. Navy's FF(X) frigate project has renewed the push for bilateral shipbuilding cooperation between the two countries, formed during the summer as a trade-off for lowered tariffs, involving a $150 billion investment, a project dubbed Make America Shipbuilding Great Again (Masga). The comments also sent shares of Hanwha Ocean rallying 12.5 percent on Tuesday compared to the previous trading day.

As production capacity erodes at major U.S. shipbuilders such as Huntington Ingalls Industries and General Dynamics, Hanwha Philly Shipyard has emerged as a potential alternative hub for advanced naval construction. The company has pledged up to $5 billion to modernize the aging Philadelphia facility and rebuild its work force.

In the near term, Hanwha is expected to focus on producing hull blocks and modular components for other U.S. shipyards. Whether it can eventually take on a more central role — building complete warships or even nuclear-powered submarines — will hinge on lawmakers’ willingness to ease legal restrictions and on the company’s ability to secure local and political support.

President Donald Trump speaks at his Mar-a-Lago club, on Dec. 22, in Palm Beach, Florida. [AP/YONHAP]

Is $5 billion enough?
Industry observers remain skeptical that $5 billion alone can transform the Philadelphia shipyard into a truly high-tech operation. Hanwha acquired the facility for just $100 million last year, showing how far the site had fallen from modern shipbuilding standards.

According to the company, the investment aims to boost annual vessel output from roughly 1.5 ships to 20. Even so, critics argue the price tag highlights the fragility of the U.S. industrial base rather than its revival.

“It underscores just how weakened the U.S. industrial base has become,” said an industry source who requested anonymity. “A shipyard capable of producing 15 ships a year would be considered a small-to-mid-sized facility in Korea, yet building such a facility in the United States will cost more than 7 trillion won [$5 billion].”

Moreover, capital alone will not solve the problem. Hanwha must also recruit and train workers in an industry facing severe labor shortages. U.S. law prohibits foreign workers from building American warships, further narrowing the talent pool, while turnover remains high across the sector.

The U.S. flag and the Hanwha flag are flying at Hanwha Philly Shipyard in Philadelphia on Aug. 26. [JOONGANG ILBO]

Despite government efforts to attract younger workers, progress has been slow. The U.S. shipbuilding work force stood at just 105,000 in 2023, according to a Maritime Administration report, just a fraction of the well over 1 million workers employed at the industry’s peak in the 1940s.

According to Hanwha, however, direct employment has grown by 30 percent in 2025 compared to the previous year, with 126 new workers hired. Facility investment is being rolled out in phases, with plans to replace 23 percent of its core equipment to enhance productivity. Maintenance and repair work on the Goliath crane is also scheduled to begin soon.

“The completion of shipyard overhaul is expected to take five to seven years,” said another shipbuilding official who requested anonymity. “Whether that road map will align with Trump’s fast-forwarded ‘Golden Fleet’ timeline is uncertain.”

Questions also remain regarding the facility's ultimate profitability due to high hurdles posed by the United States' higher labor costs compared to Korea, poor infrastructure and specialized naval vessel components that must be imported at high cost.

Hanwha’s fascination with nuclear subs
Hanwha’s attention is now on how to enter the U.S. warship market, more specifically, nuclear-powered submarines.

Hanwha Philly Shipyard is seeking to take part in the U.S. Navy’s long-term program to build 66 Virginia-class submarines by 2054. So far, only 24 of those vessels have entered service.

At a press briefing on Monday marking the first anniversary of Hanwha’s acquisition of the Philadelphia shipyard, CEO Tom Anderson said the facility has the capacity to support submarine construction. He also emphasized its strategic location, noting that it is close to the two U.S. shipyards currently building Virginia-class submarines — Huntington Ingalls’ facility in Virginia and General Dynamics’ yard in Groton, Connecticut.

Trump has given Korea the green light to build nuclear-powered submarines and mentioned the Philadelphia facility in a Truth Social post on Oct. 30, though doubts linger about the shipyard's capacity to handle production given its limited infrastructure. Legal issues are also pending.

Legal risks persist
Hanwha is currently seeking multiple U.S. licenses required to work on American warships, undergoing a series of rigorous approval steps due to the handling of classified technologies. Trump’s remarks are expected to accelerate the process, potentially pushing key clearances into early 2026 in line with his proposed “Golden Fleet” timeline.

“In any case, Hanwha is already a major defense contractor in Korea, and the significance of Trump’s remarks lies in the fact that the company has now made a meaningful entry into the U.S. naval vessel market,” said Yang Jong-seo, chief researcher at the Export-Import Bank of Korea Overseas Economic Research Institute. “That said, meaningful progress will require the U.S. to ease certain legal and regulatory barriers, making government-level support essential.”

Among the pending approvals are a U.S. defense industrial license for combat shipbuilding — which requires proof of specialized infrastructure and a sufficient American work force — and a facility security clearance needed to receive and store sensitive U.S. Navy designs and technical data.

Concerns have resurfaced over slowing momentum after the final version of the U.S. defense authorization bill for fiscal 2026 removed provisions encouraging shipbuilding cooperation with allies such as Korea and Japan. At the same time, overseas construction of U.S. military vessels remains prohibited, meaning Korean shipbuilders must source materials, components and labor domestically under existing U.S. law.

Industry experts say the removal of language encouraging bilateral cooperation may reflect the influence of lobbying by the U.S. shipbuilding sector, and makes it unlikely that more opportunities for foreign participation in new naval programs will arise.

BY LEE JAE-LIM [[email protected]]