Bessent's remark on stakes in shipbuilders rattles 'MASGA' firms

A recent remark by U.S. Treasury Secretary Scott Bessent indicating that the government may seek equity stakes in shipbuilders has rattled Korean firms at the heart of Seoul's "Make American Shipbuilding Great Again" project.

U.S. Treasury Secretary Scott Bessent attends a meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky at the Oval Office of the White House, amid negotiations to end the Russian war in Ukraine, in Washington on Aug. 18. [REUTERS/YONHAP]

Concerns are growing among Korean shipbuilders involved in the "Make American Shipbuilding Great Again" (MASGA) project after the U.S. treasury secretary hinted at possible U.S. government equity stakes in domestic shipbuilding companies.

Industry insiders worry that even if Korean firms pour vast amounts of capital and a considerable work force into revitalizing U.S. shipyards, they could end up ceding management control to Washington.

In an interview with Fox Business on Wednesday, U.S. Treasury Secretary Scott Bessent was asked whether U.S. President Donald Trump was considering acquiring shares in Nvidia.

“I don’t believe Nvidia needs financial support,” Bessent said. “So that seems not on the table right now. But could there be other industries, where reshaping, something like shipbuilding, that — sure, there could be things like that. And these are critical industries that we have to be self-sufficient [in]."

“For 20, 30 to 40 years, it was neglected,” Bessent added, signaling the U.S. government’s intention to directly lead the shipbuilding sector.

The approach mirrors recent U.S. administrations' equity-driven industrial policy in semiconductors. Washington recently converted subsidies for Intel into an equity investment, taking a 10 percent stake, and is pursuing similar holdings in Samsung Electronics, TSMC and Micron.

Industry observers believe shipbuilding may follow the same path. In April, Trump signed an executive order creating a Maritime Security Trust Fund and introducing subsidies, guarantees and regulatory relief for shipyards and ports.

A ″Make American Shipbuilding Great Again″ hat presented by the Korean trade negotiation team to U.S. President Donald Trump in July [PRESIDENTIAL OFFICE]

While Korean shipbuilders could benefit from such programs, there is also the possibility that the U.S. government will demand shares in return.

If so, Korea's $150 billion investment plan for the MASGA project — backed by both government and industry — could face reduced returns and restrictions on management control.

“The secretary’s remarks make clear that the United States intends to hold the reins of an industry critical to logistics and security,” said Yang Jong-seo, senior researcher at the Export-Import Bank of Korea. “In naval defense in particular, Washington is likely to take an even more conservative stance.”

Industry insiders said such a scenario had already been anticipated.

“Because the United States always prioritizes its own interests, there has been concern that investments made blindly on their terms would be hard to recoup,” said one shipbuilding executive.

Companies have therefore agreed to announce investment plans publicly but implement them gradually depending on circumstances.

U.S. President Donald Trump, left, welcomes President Lee Jae Myung at the White House in Washington on Aug. 25. [REUTERS/YONHAP]

During President Lee Jae Myung’s U.S. visit, HD Hyundai Heavy Industries announced plans to invest several billion dollars, while Hanwha Ocean pledged $5 billion. But Hyundai has yet to finalize the amount or timing, and Hanwha is focusing mainly on upgrading its existing Hanwha Philly Shipyard facilities.

Some experts argue that investments should be conditional on easing U.S. regulations. Current laws include the Jones Act, which mandates that ships operating in U.S. coastal waters be built domestically, and the Byrnes-Tollefson Amendment, which prohibits foreign construction or repair of U.S. Navy vessels.

Without amending these laws, Korean shipyards cannot win contracts to build U.S. coastal ships or warships. While revisions are pending in Congress, passage is uncertain, leading many to advocate a cautious, phased investment approach.

Another proposal is to keep Korea indispensable in supply chains. For example, if the United States builds liquefied natural gas carriers, the core cargo containment systems could be manufactured in Korea while only hull assembly is done stateside.

“The MASGA project is clearly an opportunity for Korean shipbuilders, but the risks are also considerable,” said Rhee Shin-hyung, a professor of naval architecture at Seoul National University. “The government and industry must carefully assess the likelihood of recovering investments and take a strategic approach.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY KIM HYO-SEONG [lim.jeongwon@joongang.co.kr]