White House proposes building Navy vessels overseas

Key facts

• The White House proposed building two combat and two non-combat vessels in foreign shipyards.
• This proposal aims to drive foreign investment into U.S. shipyards and address shipbuilding backlogs.
• The OMB opposed a House bill section that would prohibit the use of defense funds for foreign-built ships.
• The administration views foreign shipyards as having specific advancements, strengths, and technology beneficial to U.S. national security objectives.

The White House has put forward a priority legislative proposal that would permit the U.S. Navy to contract for the construction of two combat ships and two non-combat auxiliary vessels in foreign shipyards. This initiative, detailed in a policy statement from the Office of Management and Budget (OMB) to the House of Representatives concerning the fiscal year 2027 National Defense Authorization Act (NDAA), aims to stimulate foreign investment in U.S. domestic shipyards and alleviate current shipbuilding backlogs.

The OMB expressed opposition to a provision within the House bill that would ban the use of defense funds for procuring "battle force" ships built abroad. The OMB argued that this prohibition contradicts the administration's proposal, which seeks to leverage foreign shipyards for their advanced technology and expertise to expedite the growth of the U.S. shipbuilding industrial base and meet national security needs. The proposal is also seen as a way to address challenges posed by existing backlogs in the U.S. shipbuilding sector.

This push for foreign collaboration in shipbuilding comes amid heightened cooperation between South Korea and the United States to bolster America's shipbuilding industry. Seoul has committed to investing $150 billion in shipbuilding cooperation with the U.S. as part of a larger $350 billion investment pledge. The OMB referenced the "Finland Model," an approach involving initial rapid vessel acquisition from allied foreign shipyards before transferring production to the U.S. with foreign investment. President Donald Trump has also previously indicated that his administration might explore shipbuilding partnerships with South Korean and other international companies to strengthen the U.S. Navy.