In a bold move on Thursday, President Donald Trump issued a directive allowing foreign shipbuilders that make substantial investments in U.S. naval infrastructure to build certain vessels overseas. This policy shift boosted the shares of South Korea’s Hanwha Group and Italy’s Fincantieri, the two companies with the largest U.S. shipyard footprints.
Hanwha Ocean Co’s stock surged 5.6%, while Fincantieri SpA saw a 3.2% rise following the announcement. Trump’s memorandum permits these foreign builders to construct up to two ships in their parent shipyards, focusing on surface combatants, cargo tankers, and roll-on/roll-off vessels. This initiative aims to expedite ship delivery and bolster American naval capabilities.
While Hanwha leads the race due to its strong financial backing, investing $5 billion into expanding the Pennsylvania shipyard, Fincantieri has poured over $800 million into U.S. shipyards over the past decade. The shift complicates Hanwha’s interest in acquiring Austal’s U.S. operations, but the AUKUS pact might hinder Australia’s capacity to invest appropriately. The Shipbuilders Council of America expressed concerns about the implications for domestic industry competitiveness.
(With inputs from agencies.)