As the U.S. and South Korea intensify final tariff negotiations with an August 1 deadline, the South Korean government has proposed a shipbuilding cooperation project to the U.S. titled “Make American Shipbuilding Great Again” (MASGA), with a potential value of $400 billion (approximately 2.87 trillion yuan).
This project is a major economic cooperation proposal put forward by South Korea in trade negotiations. If agreed upon, it would significantly enhance the global competitiveness of the U.S. shipbuilding industry.
According to multiple sources, South Korea’s Minister of Trade, Industry, and Energy, Kim Jung-kwan, met with U.S. Secretary of Commerce Howard Rutnick in New York on July 25 (local time) and explained the South Korean government’s vision for MASGA, a U.S.-South Korea shipbuilding cooperation initiative centered on “Make American Shipbuilding Great Again.”
The MASGA project, which incorporates “Shipbuilding” into former U.S. President Trump’s signature political slogan “MAGA (Make America Great Again),” consists of large-scale investments by South Korean private shipbuilders in the U.S. and financial support such as loans and guarantees for the project.
To revitalize the declining U.S. shipbuilding industry, large-scale investments by South Korean private shipbuilders in the U.S. are required. This has been evaluated as a systematic and efficiency-maximizing plan centered on public financial support led by the South Korean government.
It is reported that public financial institutions such as the Export-Import Bank of Korea (KEXIM) and the Korea Trade Insurance Corporation (K-SURE) are discussing participation in financial support for the MASGA project. Major South Korean shipbuilders like HD Hyundai Heavy Industries and Hanwha Ocean may also be involved.
A senior official from a South Korean export financial institution stated, “South Korean companies have previously received various forms of support for projects entering the U.S. market. If specific details are confirmed, we can consider providing assistance in this direction.”
South Korea has reportedly proposed a specific amount of tens of trillions of won (hundreds of billions of dollars) to the U.S. However, the South Korean government does not rule out the possibility of adjusting the amount during future negotiations.
It is reported that Kim Jung-kwan explained the MASGA project using presentation materials and verbal descriptions during negotiations at Howard Rutnick’s residence. Rutnick, a key figure in determining whether the U.S.-South Korea tariff negotiations will succeed, responded positively and expressed considerable satisfaction with the South Korean proposal.
Earlier, on July 26, the South Korean Presidential Office emphasized in a press release regarding the Kim-Rutnick negotiations: “We confirmed the U.S.
side’s high interest in the shipbuilding sector and decided to develop an agreement plan that includes cooperation between the two countries in shipbuilding.
Industry experts in South Korea believe that the country’s shipbuilding sector, which competes with China—the U.S.’s strategic rival—for global leadership, could serve as a “unique leverage” in tariff negotiations with the U.S., which is eager to revive its domestic shipbuilding industry.
Previously, Japan successfully reduced its originally proposed 25% reciprocal tariff rate to 15% by pledging $550 billion in investments (including equity investments, loans, and guarantees), accepting a 15% “reciprocal tariff,” and significantly opening its markets for automobiles, trucks, and agricultural products like rice. The European Union also reached a trade agreement with the U.S. based on a $600 billion investment pledge.
For South Korea, whose economy is smaller than those of the EU and Japan, committing to a similar scale of investment would be a heavy burden.
It is reported that the South Korean government, based on investment intentions from major domestic corporations, proposed a “100 billion + α” direct investment plan to the U.S. At least superficially, this differs significantly from the investment packages offered by Japan and the EU.
In response, the South Korean government emphasized that the country, with its strong manufacturing industries like shipbuilding, is uniquely positioned to provide substantive assistance to the Trump administration, whose ultimate strategic goal is the revival of U.S. manufacturing. This could lead to a “technology and industrial alliance” with the U.S. This also reflects the South Korean government’s strategy of using shipbuilding as a bargaining chip to differentiate itself from Japan, which focuses primarily on financial aid.
South Korean industry experts point out that among U.S. allies, South Korea is the only country capable of effectively helping the U.S. rebuild its shipbuilding industry, including personnel training, technology transfer, and shipyard construction and operation. The MASGA project, as a comprehensive plan covering both shipbuilding operations and financial support, holds significant meaning.
The South Korean industry notes that investment pledges from Japan, the EU, and other regions are abstract in content, and their scale may be exaggerated due to guarantees. Therefore, rather than following their approach, South Korea should leverage its strengths to find a “creative solution.”
In fact, according to Japan’s official statements, only 1% to 2% of its $550 billion investment package consists of direct investments.
South Korean industry experts stress that, given the majority of Japan’s pledged investments are guarantees, the South Korean government’s proposed “100 billion + α” plan—focused on Greenfield Investments (direct investments in production facilities)—is actually larger in scale.
A senior South Korean government official emphasized, “While Japan has decided to provide comprehensive investment support through negotiations with the U.S., our proposal includes elements that other countries cannot offer, along with participation from South Korean companies. This represents a significant difference.”
