Allied Shipbuilding Needs a Clear Division of Labor
The MOC
By
Christian Cerne
June 4, 2026
The United States is trying to rebuild maritime power at a moment when its shipbuilding base is under severe strain. A recent executive order now treats shipbuilding, repair, workforce development, and maritime logistics as national security priorities. As Washington looks to allied shipyards for help, it should avoid treating Japan and South Korea as interchangeable answers to its shipbuilding problem. Each brings a different industrial system and should be used for different tasks. That distinction should organize allied maritime industrial strategy. Japan is better positioned as a sustainment, repair, and integration partner. South Korea offers a larger-scale shipbuilding industrial base. The first serious test of U.S.-Japan-South Korea cooperation is not whether Japan and South Korea can immediately build U.S. warships, but whether the three allies can create a staged maritime industrial strategy beginning with maintenance, repair, and overhaul (MRO).
The need for such a strategy begins with the changing maritime balance in the Indo-Pacific. Deterrence is not just about presence, exercises, or advanced platforms. It also depends on the ability to build, repair, maintain, and replace ships at scale over time. China’s shipbuilding dominance has made this problem harder to ignore. A recent Center for Strategic and International Studies report found that China accounted for over 53 percent of global commercial shipbuilding in 2024, while the United States accounted for only 0.1 percent.
Commercial shipbuilding, logistics, repair capacity, and naval production are increasingly linked. Washington cannot separate them anymore. The scale of the gap is tangible. The People’s Liberation Army Navy now fields more than 370 battle-force platforms and is projected to reach roughly 435 ships by 2030, while the U.S. fleet continues to struggle to meet its own force-structure targets. South Korea and Japan together account for roughly 40 percent of global commercial vessel production.
Recent reporting that U.S. officials are reengaging discussions around Japanese and Korean foreign designs and overseas-built components for future Navy work shows that the shipbuilding debate is moving beyond domestic capacity alone. The United States should look for creative strategies to reinforce its maritime industrial base in line with the changing maritime order. But allied shipbuilding cooperation will only work if Washington differentiates between what each partner can realistically provide and what each is politically willing to sustain.
Japan’s current capability is less likely to serve as a large-scale capacity addition to U.S. shipbuilding than as a partner in sustainment, repair, and naval integration. The U.S.-Japan shipbuilding memorandum established a bilateral working group on shipbuilding capacity, maritime industrial development, workforce cooperation, supply-chain resilience, and technology exchange. The risk is that such a broad agenda becomes a stalled dialogue. Its near-term value should be concrete sustainment and repair gains, including faster maintenance options for U.S. vessels in the Western Pacific.
Japan’s comparative advantage is strongest where sustainment depends on alliance access, operational familiarity, and existing U.S. naval infrastructure. NAVSEA Japan Regional Maintenance Center already supports Seventh Fleet readiness from Yokosuka and Sasebo, and U.S. Navy materials state that Japan-based facilities help maintain America’s only forward-deployed aircraft carrier and 21 surface combatants. Because Japan is already part of the U.S. Navy’s forward maintenance ecosystem, Washington can leverage existing infrastructure, alliance procedures, and supply-chain relationships to expand repair and sustainment cooperation more easily.
For military readiness, this should be central to the strategy. Repairing and sustaining U.S. vessels closer to the operating theater would reduce downtime and keep more ships available for day-to-day presence and crisis response. For a Navy stretched across the Indo-Pacific, geography is not secondary. A ship that can be repaired forward spends less time transiting away from the region.
Early use of Japanese yards shows that Japan can become a more important partner in this system. According to Japan’s Ministry of Defense, the December repair of the Arleigh Burke-class destroyer USS Fitzgerald in Maizuru marked the first case in which a Japanese company repaired a U.S. naval vessel homeported in the U.S. mainland. But isolated repairs are not enough. Washington and Tokyo should turn these early cases into a broader sustainment framework that keeps more U.S. vessels operational in the Western Pacific.
South Korea provides a level of scale and commercial experience that the United States desperately needs. Its major shipbuilders make potential U.S. investment in yards more reliable and cost-effective. Seoul’s MASGA proposal links shipyard construction, workforce training, and U.S. Navy maintenance to a broader effort to support American shipbuilding. Recent U.S.-South Korea defense documents have also highlighted maintenance, repair, and overhaul work by Korean companies on U.S. vessels, including plans for a U.S. warship to undergo MRO in South Korea for the first time. Korean firms already operate at a scale the U.S. maritime industrial base cannot easily replicate, and their process discipline, commercial throughput, and industrial experience could strengthen the broader U.S. maritime ecosystem.
South Korea’s comparative advantage is different because its shipbuilding strength lies in industrial scale, commercial throughput, and yard capacity. According to the OECD Peer Review of the Korean Shipbuilding Industry 2026, South Korea accounted for roughly 27 percent of global shipbuilding completions in 2024, making it the world’s second-largest shipbuilding nation after China. The same review found that Korea accounted for over 65 percent of global LNG carrier orders in 2024 and retained a technical edge in cryogenic cargo containment and high-efficiency propulsion systems. HD Hyundai Heavy Industries also operates 10 large dry docks and nine Goliath cranes and says it constructs around 50 large vessels annually. That makes Korea especially useful for the capacity side of the problem: yard investment, workforce training, component production, and selective co-production. Korea can help the United States address the deeper industrial-base deficit, while Japan is better placed to improve forward operational availability.
The path for Japan and South Korea should therefore diverge. For Japan, the priority should be building forward MRO infrastructure that keeps U.S. vessels operational in the Western Pacific. For South Korea, MRO can be an entry point, but the larger opportunity lies in strengthening the broader allied shipbuilding base through yard investment, workforce development, component production, and selective co-production. That would require U.S. investment, workforce development plans, and a deliberate effort to translate South Korea’s commercial shipbuilding strengths into naval-industrial capacity. Allied shipbuilding in the Indo-Pacific should not collapse into a generic repair agenda. Japan can help solve the readiness and sustainment problem closest to the theater, while South Korea can help address the deeper capacity problem in the maritime industrial base.
This division of labor would also have political value. The politics around trilateral cooperation have grown rougher. South Korea’s post-Yoon political crisis, persistent Japan-South Korea sensitivities, and a more transactional U.S. approach to alliance management have all complicated the environment in which industrial cooperation would have to operate. Shipbuilding cooperation depends on long timelines, stable procurement commitments, technology sharing, and confidence that political support will survive leadership changes. One summit will not fix that.
Shipbuilding offers a practical way to deepen strategic and industrial defense ties with America’s two most important Indo-Pacific partners. At a time when the U.S.-Japan-South Korea relationship is politically strained, shipbuilding offers a way to ease diplomatic pressure by focusing cooperation on shared industrial needs rather than unresolved historical or political disputes. A shared interest in preserving the Indo-Pacific maritime balance gives the three countries a reason to cooperate, but it does not automatically override current diplomatic pressures.
This division of labor would also help manage domestic political resistance inside the United States. If allied cooperation is framed as foreign shipyards taking over America’s shipbuilding problem, it will face understandable pushback from shipbuilders, maritime labor groups, shipping interests, and members of Congress. The better argument is that Japan and South Korea would fill different gaps while reinforcing domestic renewal. Japan would help keep more U.S. vessels operational forward, while South Korea would support capacity, investment, and industrial learning that can strengthen the broader U.S. maritime base. Allied capacity should therefore be treated as a complement to rebuilding U.S. yards, not as a substitute for them.
The objective should not be to outsource America’s shipbuilding problem. It should be to reduce the region’s disproportionate dependence on an overstretched U.S. shipbuilding system by building a more durable allied production base. That requires turning political alignment into industrial depth. Right now, that gap is still there. If U.S.-Japan-South Korea cooperation can produce practical maritime capacity, it will become a more durable pillar of Indo-Pacific deterrence. If it cannot, the trilateral framework may remain politically active while lacking the industrial depth needed to sustain maritime power.
Christian Cerne is a master’s candidate in International and Development Studies at the Geneva Graduate Institute, focusing on Indo-Pacific security and strategic resource diplomacy. He is currently a research intern with Pacific Forum.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.
Center for Maritime Strategy
By Christian Cerne
The United States is trying to rebuild maritime power at a moment when its shipbuilding base is under severe strain. A recent executive order now treats shipbuilding, repair, workforce development, and maritime logistics as national security priorities. As Washington looks to allied shipyards for help, it should avoid treating Japan and South Korea as interchangeable answers to its shipbuilding problem. Each brings a different industrial system and should be used for different tasks. That distinction should organize allied maritime industrial strategy. Japan is better positioned as a sustainment, repair, and integration partner. South Korea offers a larger-scale shipbuilding industrial base. The first serious test of U.S.-Japan-South Korea cooperation is not whether Japan and South Korea can immediately build U.S. warships, but whether the three allies can create a staged maritime industrial strategy beginning with maintenance, repair, and overhaul (MRO).
The need for such a strategy begins with the changing maritime balance in the Indo-Pacific. Deterrence is not just about presence, exercises, or advanced platforms. It also depends on the ability to build, repair, maintain, and replace ships at scale over time. China’s shipbuilding dominance has made this problem harder to ignore. A recent Center for Strategic and International Studies report found that China accounted for over 53 percent of global commercial shipbuilding in 2024, while the United States accounted for only 0.1 percent.
Commercial shipbuilding, logistics, repair capacity, and naval production are increasingly linked. Washington cannot separate them anymore. The scale of the gap is tangible. The People’s Liberation Army Navy now fields more than 370 battle-force platforms and is projected to reach roughly 435 ships by 2030, while the U.S. fleet continues to struggle to meet its own force-structure targets. South Korea and Japan together account for roughly 40 percent of global commercial vessel production.
Recent reporting that U.S. officials are reengaging discussions around Japanese and Korean foreign designs and overseas-built components for future Navy work shows that the shipbuilding debate is moving beyond domestic capacity alone. The United States should look for creative strategies to reinforce its maritime industrial base in line with the changing maritime order. But allied shipbuilding cooperation will only work if Washington differentiates between what each partner can realistically provide and what each is politically willing to sustain.
Japan’s current capability is less likely to serve as a large-scale capacity addition to U.S. shipbuilding than as a partner in sustainment, repair, and naval integration. The U.S.-Japan shipbuilding memorandum established a bilateral working group on shipbuilding capacity, maritime industrial development, workforce cooperation, supply-chain resilience, and technology exchange. The risk is that such a broad agenda becomes a stalled dialogue. Its near-term value should be concrete sustainment and repair gains, including faster maintenance options for U.S. vessels in the Western Pacific.
Japan’s comparative advantage is strongest where sustainment depends on alliance access, operational familiarity, and existing U.S. naval infrastructure. NAVSEA Japan Regional Maintenance Center already supports Seventh Fleet readiness from Yokosuka and Sasebo, and U.S. Navy materials state that Japan-based facilities help maintain America’s only forward-deployed aircraft carrier and 21 surface combatants. Because Japan is already part of the U.S. Navy’s forward maintenance ecosystem, Washington can leverage existing infrastructure, alliance procedures, and supply-chain relationships to expand repair and sustainment cooperation more easily.
For military readiness, this should be central to the strategy. Repairing and sustaining U.S. vessels closer to the operating theater would reduce downtime and keep more ships available for day-to-day presence and crisis response. For a Navy stretched across the Indo-Pacific, geography is not secondary. A ship that can be repaired forward spends less time transiting away from the region.
Early use of Japanese yards shows that Japan can become a more important partner in this system. According to Japan’s Ministry of Defense, the December repair of the Arleigh Burke-class destroyer USS Fitzgerald in Maizuru marked the first case in which a Japanese company repaired a U.S. naval vessel homeported in the U.S. mainland. But isolated repairs are not enough. Washington and Tokyo should turn these early cases into a broader sustainment framework that keeps more U.S. vessels operational in the Western Pacific.
South Korea provides a level of scale and commercial experience that the United States desperately needs. Its major shipbuilders make potential U.S. investment in yards more reliable and cost-effective. Seoul’s MASGA proposal links shipyard construction, workforce training, and U.S. Navy maintenance to a broader effort to support American shipbuilding. Recent U.S.-South Korea defense documents have also highlighted maintenance, repair, and overhaul work by Korean companies on U.S. vessels, including plans for a U.S. warship to undergo MRO in South Korea for the first time. Korean firms already operate at a scale the U.S. maritime industrial base cannot easily replicate, and their process discipline, commercial throughput, and industrial experience could strengthen the broader U.S. maritime ecosystem.
South Korea’s comparative advantage is different because its shipbuilding strength lies in industrial scale, commercial throughput, and yard capacity. According to the OECD Peer Review of the Korean Shipbuilding Industry 2026, South Korea accounted for roughly 27 percent of global shipbuilding completions in 2024, making it the world’s second-largest shipbuilding nation after China. The same review found that Korea accounted for over 65 percent of global LNG carrier orders in 2024 and retained a technical edge in cryogenic cargo containment and high-efficiency propulsion systems. HD Hyundai Heavy Industries also operates 10 large dry docks and nine Goliath cranes and says it constructs around 50 large vessels annually. That makes Korea especially useful for the capacity side of the problem: yard investment, workforce training, component production, and selective co-production. Korea can help the United States address the deeper industrial-base deficit, while Japan is better placed to improve forward operational availability.
The path for Japan and South Korea should therefore diverge. For Japan, the priority should be building forward MRO infrastructure that keeps U.S. vessels operational in the Western Pacific. For South Korea, MRO can be an entry point, but the larger opportunity lies in strengthening the broader allied shipbuilding base through yard investment, workforce development, component production, and selective co-production. That would require U.S. investment, workforce development plans, and a deliberate effort to translate South Korea’s commercial shipbuilding strengths into naval-industrial capacity. Allied shipbuilding in the Indo-Pacific should not collapse into a generic repair agenda. Japan can help solve the readiness and sustainment problem closest to the theater, while South Korea can help address the deeper capacity problem in the maritime industrial base.
This division of labor would also have political value. The politics around trilateral cooperation have grown rougher. South Korea’s post-Yoon political crisis, persistent Japan-South Korea sensitivities, and a more transactional U.S. approach to alliance management have all complicated the environment in which industrial cooperation would have to operate. Shipbuilding cooperation depends on long timelines, stable procurement commitments, technology sharing, and confidence that political support will survive leadership changes. One summit will not fix that.
Shipbuilding offers a practical way to deepen strategic and industrial defense ties with America’s two most important Indo-Pacific partners. At a time when the U.S.-Japan-South Korea relationship is politically strained, shipbuilding offers a way to ease diplomatic pressure by focusing cooperation on shared industrial needs rather than unresolved historical or political disputes. A shared interest in preserving the Indo-Pacific maritime balance gives the three countries a reason to cooperate, but it does not automatically override current diplomatic pressures.
This division of labor would also help manage domestic political resistance inside the United States. If allied cooperation is framed as foreign shipyards taking over America’s shipbuilding problem, it will face understandable pushback from shipbuilders, maritime labor groups, shipping interests, and members of Congress. The better argument is that Japan and South Korea would fill different gaps while reinforcing domestic renewal. Japan would help keep more U.S. vessels operational forward, while South Korea would support capacity, investment, and industrial learning that can strengthen the broader U.S. maritime base. Allied capacity should therefore be treated as a complement to rebuilding U.S. yards, not as a substitute for them.
The objective should not be to outsource America’s shipbuilding problem. It should be to reduce the region’s disproportionate dependence on an overstretched U.S. shipbuilding system by building a more durable allied production base. That requires turning political alignment into industrial depth. Right now, that gap is still there. If U.S.-Japan-South Korea cooperation can produce practical maritime capacity, it will become a more durable pillar of Indo-Pacific deterrence. If it cannot, the trilateral framework may remain politically active while lacking the industrial depth needed to sustain maritime power.
Christian Cerne is a master’s candidate in International and Development Studies at the Geneva Graduate Institute, focusing on Indo-Pacific security and strategic resource diplomacy. He is currently a research intern with Pacific Forum.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.