U.S. Navy Chief tours Philadelphia Shipyard as precursor to forthcoming Korea-US tariff agreement, according to Hanwha.
In a significant development, U.S. Navy Secretary John Phelan and White House Budget Director Russell Vought visited Hanwha Group's Philly Shipyard in Philadelphia on Wednesday. The visit, which occurred just hours before South Korea and the U.S. finalized their new tariff agreement, was instrumental in showcasing joint shipbuilding efforts and securing U.S. government commitment to this strategic partnership.
During their tour, Phelan and Vought inspected major production facilities at the Philadelphia site, guided by Hanwha Group Vice Chair Kim Dong-kwan, alongside other senior U.S. government officials. The visit aimed to review Hanwha's investments aimed at bolstering local shipbuilding capacity.
Kim reiterated Hanwha's commitment to supporting the revitalization of U.S. shipbuilding. He emphasized plans to use the shipyard as a strategic base and sought government support for investment and collaboration between South Korea and the U.S. Kim also traveled to the U.S. to support the negotiations.
The Philadelphia Shipyard, acquired by Hanwha for $100 million in 2024, has been positioned as a symbol of Korean support for the U.S. shipbuilding industry. Hanwha plans to apply production and operations systems used in Korea to increase annual capacity from one ship to 10 by 2035. The company also aims to expand the Philadelphia Shipyard as a center for shipbuilding, maintenance, overhaul, and repair for U.S. naval vessels.
The visit directly influenced the successful conclusion of a new U.S.-South Korea tariff agreement. Korea and the U.S. agreed to reduce the planned reciprocal tariffs on imports from 25 percent to 15 percent, including on automobiles and auto parts. Of the $350 billion Korea pledged to invest in the U.S. as part of the agreement, $150 billion will be allocated to enhancing the shipbuilding partnership.
The shipbuilding partnership between the two countries played a key role in the deal. Hanwha's shipyard expansion aims to bolster the U.S. naval vessels' maintenance, overhaul, and repair capabilities. The visit was also a significant step towards the implementation of the Make American Shipbuilding Great Again (MASGA) initiative, which aims to enhance U.S. shipbuilding through Korean-style production management and technology.
Trade Minister Yeo Han-koo, a member of Korea's tariff negotiation team, said business leaders, including Kim, worked closely with the government by sharing strategic information and leveraging their networks. He believes their support definitely contributed to the success of the deal.
In summary, the visit symbolized and concretely advanced U.S.-South Korea industrial cooperation. It acted as a catalyst for the tariff agreement by showcasing joint shipbuilding efforts and securing U.S. government commitment to this strategic partnership. The agreement is expected to boost the U.S. shipbuilding industry, contributing to the strategic partnership between the two nations.
Despite the focus on the U.S.-South Korea tariff agreement, Phelan and Vought's visit to the Philadelphia Shipyard also highlighted the importance of sports and weather. During their tour, Kim Dong-kwan mentioned that Hanwha plans to organize regular sports events at the shipyard to encourage unity and boost employee morale, turning the shipyard into a lively community. Furthermore, Kim expressed the wish for favorable weather conditions during the expansion process, as the construction timeline relies heavily on the cooperative weather conditions.
