US plan taking shape to shrink Chinas shipbuilding lead

The United States’ ability to build vital maritime ships and submarines was pivotal to its rise as a global superpower. However, longstanding complacency has caused the US shipbuilding industry to stagnate, undermining its readiness for today’s pressing security challenges.

The US government is now brainstorming methods to revitalize shipbuilding and is engaging in various diplomatic endeavors with allied countries to supplement the effort, either through investments or naval exports.

Washington is now focused on overcoming core obstacles in its naval shipbuilding industry to revive US maritime dominance and regain an edge over rivals such as China.

The United States has led in naval industrialization, expanding efforts since President Theodore Roosevelt modernized the Navy. Through its naval industry, America projects military power in wars and maintains overseas bases today, leveraging aerial and maritime capabilities.

When the Cold War peaked amid threats from a Soviet-dominated world, the United States faced new challenges to its power projection. In recent years, production decreased significantly, and stagnation in fleet modernization and modifications became more apparent.

The US Navy’s Littoral Combat Ship (LCS) program aimed to produce 52 ships, but due to cost and schedule constraints, only 35 are serviceable. The Zumwalt-class stealth destroyers, originally planned for 32, now have only three ready due to high costs. Aircraft carriers, such as the USS Gerald R Ford, have faced delays for failing to meet technological standards.

A Cato Institute report details how Washington once treated shipyards as vital assets, but after the Cold War, the country grew complacent. Today, large naval vessel output has dropped by over 80% from its Cold War-era height.

America’s decline in shipbuilding is now a critical strategic problem, with China’s rapidly expanding naval output challenging US maritime superiority in key regions.

During decades of conflict in the Middle East, South Asia and North Africa (spanning the 1990s through the early 2020s), China built the world’s largest maritime force, putting pressure on the US to catch up. Now, in response, the US aims to rebound through alliances and renewed investment.

Reflecting this shift toward allied support, Finland’s naval exports to the US have become increasingly relevant since 2025. As the US seeks fresh support from allies, Finland has emerged as a key contributor.

Finland and the United States are close allies whose ties have improved since Helsinki’s NATO ascension in 2023. With the Arctic region a key theater where Moscow and Beijing are consolidating, Washington is bolstered by Finnish naval vessels to expand its presence and counter China and Russia.

On October 9, 2025, the Trump administration signed a deal with President Alexander Stubb to acquire four icebreakers from Finnish shipyards, following Finland’s NATO accession earlier in 2025. These Finnish-made medium-sized ice-piercers will supplement the US Coast Guard fleet alongside the existing Polar Security Cutters.

Furthermore, following the October 2025 agreement, the United States will construct seven additional Arctic Security Cutters in Texas and Louisiana, helping to revitalize American shipbuilding. Facing a growing need for Arctic presence against Russian and Chinese naval activity, Finnish icebreakers provide a key solution for the US Navy.

In late October, following recent US outreach for maritime cooperation, Washington and Tokyo signed a memorandum on shipbuilding, enhanced communications and artificial intelligence. This memorandum outlines Japanese investments in American shipbuilding and the launch of joint training programs for US workers.

As part of the October 2025 memorandum, Japan, following Finland’s earlier 2025 example, will help the United States upgrade the icebreaker industry. This initiative supports Arctic operations, especially given increased Russian activity near Alaska in recent years.

Following a major trade agreement on shipbuilding investments, entered on October 25, both countries now aim to enhance maritime cooperation to counter Beijing’s growing Indo-Pacific ambitions.

During President Trump’s October 2025 state visit to South Korea, American naval shipbuilder HII and Korean firm Hyundai finalized a deal to upgrade the US Navy’s auxiliary ships. The deal schedules Hyundai’s delivery of 13 logistics ships to begin in fiscal year 2028.

The premier Korean shipbuilding company, Hanwha, is also investing in American naval revitalization in late 2025. According to Politico, the White House supports South Korean experts coming to teach shipbuilding skills across American naval yards starting the following year.

Concurrent investment from Seoul was announced in late October 2025, with US$150 billion earmarked for the American shipbuilding sector. The Lee Jae-myung administration seeks to negotiate trade deals with President Trump and strengthen the U.S.-ROK alliance through these investments.

In return for these late 2025 investments, President Trump authorized South Korea to build a nuclear-powered submarine for the South Korean navy. This authorization will make Seoul the first non-nuclear power to build such a vessel.

Despite promising deals with Finland, Japan and South Korea, US domestic shipbuilding still faces challenges: bureaucratic hurdles, skilled labor shortages and imbalanced funding. Stakeholders will need to address these issues to ensure successful modernization and industrial revival.

America’s nationwide shipbuilding industry should promote recruitment drives at technical schools and universities to attract talent to its naval yards. Hands-on internships, fellowships and apprenticeships in shipyards can accelerate training for recruits.

Now that new procurement orders take several years to complete, underscored by Australia’s deal to receive three Virginia-class nuclear submarines under AUKUS, Washington should prioritize youth for career positions in shipbuilding rather than relying on an aging labor force.

The United States Naval Institute notes that once a new specialized workforce reaches capacity, shipyards can quickly increase production and maintenance. With a renewed workforce and increased shipbuilding and manufacturing sites, the US government can spread contracts, reduce dependence on a single source and help the Navy meet its operational timelines.

Allied support from Finland, Japan and South Korea will strengthen the US shipbuilding sector, but lasting maritime dominance depends on focused domestic investment and a revitalized industrial base. Only these decisive steps will restore the production capacity essential for future US security and narrow China’s lead.

Julian McBride is a defense analyst and contributing editor at 19FortyFive