Japan and South Korea Face Hurdles in Meeting U.S. Shipbuilding Demand

As the United States considers imposing steep fees on China-linked vessels calling at

American ports, attention has turned to alternative shipbuilding nations. However, both

Japan and South Korea—longtime maritime manufacturing powerhouses—are reportedly

facing significant challenges in scaling up to meet any sudden shift in demand.

Japanese shipyards are operating near full capacity, with new slots unavailable until at least

2028. The country’s established reputation for quality construction remains intact, but

limited availability hampers its ability to absorb additional orders from global shipping

lines seeking to diversify away from Chinese-built ships.

In South Korea, financial strain remains an obstacle. After enduring several years of fiscal

hardship and restructuring across major shipyards, many builders are cautious about rapid

expansion. Although known for high-tech ship designs and production efficiency, Korea’s

ability to capitalize on the U.S. policy shift is currently constrained.

Meanwhile, American shipbuilders would need substantial capital infusions and upgrades

in technological capacity to meet increased domestic demand. The gap between existing

infrastructure and the projected need highlights the broader implications of potential

protectionist policies.

Currently, China, South Korea, and Japan collectively dominate the global shipbuilding

industry, accounting for 90% of total output. China alone controls more than half of the

global market share for merchant vessels—a dominance that poses strategic and economic

questions for U.S. policymakers navigating this complex realignment.

The U.S. initiative to curb reliance on Chinese shipbuilding has sparked a ripple effect across

the maritime sector, testing the limits of global production capacity and raising questions

about long-term resilience and strategic partnerships.