By Patrick M. Cronin and David Glick

Introduction

Industrial endurance and allied integration are indispensable to making deterrence-by-denial against China credible under the 2026 National Defense Strategy. The Trump administration’s Maritime Action Plan rightly elevates cooperation with South Korea and Japan. But viewing these allies as a temporary bridge to U.S. revitalization understates the scale and longevity of the China challenge. What is needed is a fully integrated, long-term allied shipbuilding ecosystem, that can generate surge capacity, distributed production, and wartime repair across the Indo-Pacific. Without that durable industrial architecture, denial remains declaratory rather than operational. This essay makes that case.

If a war erupts over Taiwan, what will sink the U.S. Navy first: Chinese missiles or American shipyards? Analysts have catalogued the widening gap between China’s defense industrial base and America’s. Shipbuilding sits at the center of that imbalance. What began the decade as a pacing challenge has become a structural industrial advantage for Beijing. In the Indo-Pacific, deterrence now depends less on the number of hulls afloat than on the ability to replace, repair, and regenerate them under fire. On that measure of industrial endurance, the United States is dangerously behind. 

The U.S. fleet lacks the scale, resilience, and regenerative capacity to compete with China’s expanding navy and the industrial base behind it. Even with higher funding and domestic reform, the United States alone cannot build the fleet required to match–let alone “overmatch”–China’s output. The U.S. Navy fleet currently stands at 290 ships compared to China’s 331. That gap, by itself, is not decisive. But Beijing can draw on a vast coast guard, merchant marine, and dual-use civilian fleet that allows Beijing to surge up to 5,500 hulls for support, refueling, and transport. The United States has roughly 80 comparable auxiliary and sealift vessels. This disparity reflects more than fleet size; it exposes structural constraints in American industrial capacity.

America’s defense industrial base, and shipbuilding in particular, has become structurally brittle after the collapse of commercial shipbuilding, decades of consolidation and specialization, workforce attrition, and highly inconsistent demand signals. Today, a remarkable degree of U.S. Navy major combatants are constructed at a handful of specialized yards run by two defense juggernauts: Huntington Ingalls Industries and General Dynamics.

These structural limitations matter because deterrence against Beijing now requires maritime power at a level the U.S. industrial base cannot produce independently. Attempts at domestic reform including President Trump’s ambition to build a “Golden Fleet” reflect a correct diagnosis of the problem, and executing the Maritime Action Plan may be key to reviving America’s claim to be a maritime nation. But execution is far from guaranteed. Previous U.S. efforts to slow China’s seapower ascendancy, including during Trump’s first term, have focused on massive increases in defense spending, radical policy changes, or both and many of these plans have stalled out.

As one of America’s top naval analysts, Ronald O’Rourke, argues, U.S. shipbuilding shortfalls reflect a systemic, self-reinforcing failure in which unaffordable plans, industrial limits, workforce bottlenecks, and flawed acquisition processes have collectively undermined capacity. The bottom line is that no amount of additional spending on ships or marginal policy reform within the United States alone can resolve the problem, especially as China’s larger, dual-use shipbuilding ecosystem turns American naval production capacity into a strategic liability.

“America First” rightly underscores the imperative to rebuild U.S. industrial capability, including its shipbuilding. But America alone, or cooperation limited to full onshoring, is insufficient. Unless Washington fully leverages the capabilities of allied seapowers, China’s maritime edge will grow. As Brent Sadler notes in Naval Power in Action, China has managed to “out-Mahan” the United States through an “aggressive and focused prioritization of a powerful civil-military national maritime sector.” His proposed remedy of a G-7-like consortium of maritime nations to meet the challenge is sound, but the foundational starting point must be to better harness the collective shipbuilding capabilities of the United States, South Korea, and Japan.

Although President Trump may instinctively support integrating allied shipbuilding capacity, current policy concentrates on comprehensive onshoring. The Maritime Action Plan, for all its strengths, largely confines allies to providing foreign direct investment in U.S. shipyards and maritime infrastructure. That contribution is important but insufficient.

A politically sustainable solution requires durable mutual benefit. Deterring China at scale will demand the systematic integration of allied shipbuilding capacity, especially from South Korea and Japan, into U.S. naval force planning. Capital that flows into American docks from threats of tariffs and placing conditionality on security alliances will undermine the alliance bonds on which our strategy depends. Without deep industrial cooperation, the United States will lack the industrial and thus operational resilience needed for credible Indo-Pacific deterrence. Absent complementary reforms, such as targeted modifications to the Jones Act and related statutes that tether shipbuilding exclusively to domestic yards, Washington will struggle to erect a shipbuilding defense industrial base that is both politically acceptable at home and economically sustainable for South Korea and Japan.

But let us start by briefly considering the strategic objective of deterrence by denial of China, because that is at the heart of calls for reviving shipbuilding capacity in the first place.

The Deterrence Challenge: Responding to Pressure with Endurance

The Trump administration’s National Security Strategy identifies China’s bid for dominance within and beyond the First Island Chain as a direct challenge to regional stability, while the National Defense Strategy prioritizes a defense-by-denial approach anchored along that same geography. This framework highlights that successful deterrence must operate not only against invasion, but across the subtler and more pervasive forms of coercion that Beijing prefers. Xi Jinping appears to recognize that a forcible seizure of Taiwan would carry extraordinary risks, yet his purging of senior generals heightens the danger of miscalculation and reinforces the need for full-spectrum deterrence.

A central danger is that Beijing seeks to exhaust Taiwan psychologically, economically, and militarily rather than gamble on an all-out invasion. China commands a broad menu of coercive options, ranging from gray-zone harassment and maritime quarantine to incremental blockade or amphibious assault, all designed to impose cumulative pressure while exploiting gaps in allied endurance and logistics rather than inducing a single decisive battle. For example, China has recently rehearsed navigating some 1,400 fishing vessels to form a 200-mile-long sea barrier that could support a blockade of Taiwan. This, alongside other graduated options, allows Beijing to vary pace and intensity, steadily degrading Taiwan’s resilience while testing allied political will.

China’s sprawling military-industrial complex further broadens its operational choices. The People’s Liberation Army (PLA) can field large quantities of long-range anti-ship missiles, submarines, and other systems designed to deny U.S. forces freedom of action at increasing distances. Operating close to home, Chinese forces benefit from interior lines of communication, proximate shipyards, and rapid repair and replacement capacity. These advantages allow the PLA to absorb losses and continue operations in ways that impose disproportionate strains on allied forces. In this context, deterrence erodes not through dramatic battlefield defeat, but through persistent pressure that gradually constrains Taiwan’s strategic breathing room.

China’s approach is reinforced by Xi’s “Overall National Security Outlook” and military-civil fusion, which together harness military, economic, technological, and political instruments into an integrated system for applying sustained pressure. The PLA Navy has increasingly revealed strategies of exhaustion, strangulation, and decapitation, all of which hinge on wearing down an opponent’s ability to regenerate combat power. These concepts can only be countered by adversaries whose own industrial and logistical systems can absorb shocks, reconstitute forces, and continue operating under demanding wartime conditions.

The human reality of protracted conflict underscores this requirement. Carl von Clausewitz reminded strategists that war is a “dangerous business” defined by fear, friction, and the grinding down of human will. E. B. Sledge’s graphic portrait of amphibious warfare at Peleliu and Okinawa captures how terror and attrition consume both personnel and equipment. Deterrence, therefore, fails not only when forces are defeated in battle, but when political will, logistics networks, and industrial capacity collapse under constant pressure. Industrial sustainment is not an afterthought but the oft-neglected backbone of strategic endurance.

History underscores this lesson. The high watermark of American shipbuilding came in World War II, when the rapid production of Essex-class carriers transformed U.S. naval power and reshaped the global maritime balance. This capacity for rapid regeneration was a strategic capability in its own right, enabling the United States to outlast a determined adversary in a prolonged contest of endurance.

The same logic applies today. Against a peer competitor prepared for protracted conflict, deterrence requires a fleet designed not only for initial advantage but for the ability to fight, absorb blows, and regenerate combat power over time. This demands a large, balanced, and modern force supported by industrial capacity for rapid maintenance, repair, and replacement. Such depth must underpin a “hedge force” emphasizing quantity, distribution, and survivability across manned and unmanned platforms, and avoiding over-reliance on a small number of exquisite, vulnerable assets.

Ultimately, regeneration becomes a deterrent mechanism. A force that can endure is a force that can deny, dissuade, and defeat an opponent.

United States Constraints

The U.S. Navy’s strengths are not well matched to the challenges of a conflict with China. Although American platforms may possess momentarily superior individual capability, a fight in the South China Sea would unfold inside a dense Chinese A2/AD envelope, sustained by large inventories of land-based anti-ship missiles. In a missile-saturated battlespace, deterrence cannot rest on qualitative superiority alone. It requires layered capability, what the Hudson Institute defense team has conceptualized as “edge,” “pulsed,” and “core” forces, all supported by critical enablers. Industrial endurance is indispensable to field such layers while retaining the capacity to absorb and regenerate losses. Combat experience and alliance exercises enhance readiness, but qualitative advantages cannot offset numerical and industrial imbalance in a protracted war fought in China’s near seas.

Countering Beijing’s coercive strategy therefore demands endurance as much as lethality. Taiwan must demonstrate the political will, societal resilience, and frontline resistance to withstand sustained pressure. The United States and Japan, supported by South Korea as a rear-area sustainment, repair, and replacement hub, must present a unified posture that undercuts Chinese confidence across the spectrum of coercion. Any visible alliance seams will be exploited, perhaps as suggested by a recent U.S.-China air encounter in the Yellow or West Sea.

A credible deterrence-by-denial strategy integrates these elements: resilient frontline forces at the edge; long-range strike forces that can be surged or “pulsed” into theater; sufficient “core” forces to sustain operations over time; and the enabling architecture of ISR, logistics, command and control, and industrial capacity, that binds them together. Without this layered military and industrial integration, the United States military will display significant operational gaps and deterrence in the Indo-Pacific will remain vulnerable.

The United States currently lacks the industrial foundation required to meet this challenge. While the PLA Navy has been built primarily for high-intensity regional conflict, much of the U.S. fleet reflects decades of emphasis on power projection and presence missions in permissive environments. At the same time, as China’s shipbuilding capacity has swelled, the U.S. Navy has struggled merely to sustain a large and ready fleet to meet its global commitments.

The United States has particularly lagged behind China in the construction of platforms suited to navigate the South China Sea’s littoral and archipelagic geography. Fast, maneuverable frigates are likely to be central to distributed operations in the Indo-Pacific. China can now launch multiple modern frigates annually, with construction timelines measured in months. By contrast, the United States’ Constellation-class frigate program has yet to deliver a single operational hull after nearly a decade of effort amid design instability and cascading delays. At the same time, the United States has been upgrading cutters designed for the Coast Guard as stopgap naval vessels, despite their lack of vertical launch systems, even as China has shifted naval platforms into its formidable coast guard.

These and other difficulties stem from persistent structural weaknesses in domestic shipbuilding and maintenance infrastructure, as suggested at the outset of this essay. Consolidation has reduced competition and flexibility. Skilled labor shortages constrain manufacturing. Inconsistent procurement planning disrupts both workers’ lives and capital investment. Regulatory red tape slows production and increases cost. New construction routinely runs late and over budget, while maintenance backlogs keep operational ships tied to the pier. Industrial shortcomings sap U.S. naval credibility.

Civilian and military leaders alike acknowledge the shipbuilding gap with China. President Trump’s “Make Shipbuilding Great Again” initiative, calls for a Golden Fleet, and proposal for defense spending approaching $1.5 trillion, all of which preceded the Maritime Action Plan of February 2026, underscore growing recognition of the problem. These gestures matter, but slogans and topline numbers do not build ships. Reviving U.S. shipbuilding will require sustained political discipline, industrial reform, workforce development, and years of execution. For example, the idea of 100 maritime prosperity zones sounds appealing, but risks overreach without delivering serious production. None of this is guaranteed. Failure would leave the United States attempting to deter a maritime peer with an industrial base unfit for protracted competition.

The reality is that U.S. domestic shipbuilding capacity cannot expand fast enough to match Chinese production rates within the timeframe deterrence demands. Building new shipyards or dramatically expanding existing ones requires time, secure supply chains, and skilled labor that the United States currently lacks. The Trump administration has recognized this constraint and begun to pursue serious allied cooperation. Agreements with Australia, Japan, and South Korea are steps in the right direction, but they remain insufficient. Incremental progress will not produce the fleet needed to compete with China.

Allied Shipbuilding Capacity

Integrating allied industrial capacity into U.S. naval force planning offers several advantages.

First, allied shipyards represent an immediate force multiplier by bolstering collective shipbuilding. South Korea and Japan possess advanced shipbuilding industries with available capacity, skilled workforces, and resilient supply chains. Leveraging these yards would allow the United States to accelerate production without waiting years for domestic capacity to mature. In key areas such as automated manufacturing and AI-enabled shipbuilding, allied firms already lead global best practices.

Second, forward-deployed repair and maintenance capacity in allied countries would provide crucial operational benefits during a Taiwan or South China Sea contingency. Damaged ships could reach allied yards in days rather than weeks, preserving combat power and reducing exposure during trans-Pacific transits. This distributed sustainment architecture materially enhances fleet readiness and resilience.

Third, allied cooperation can modernize the combined naval industrial base. Different engineering traditions and production methods can complement U.S. designs and spur innovation. Key U.S. allies remain leaders in advanced manufacturing and high-tech shipbuilding. Collaborative development will spread research and development costs while expanding the menu of available platforms, particularly for modular and unmanned systems.

Fourth, integrated allied production strengthens deterrence by signaling coalition resolve. When allies invest directly in building U.S. naval power, they demonstrate commitment to collective defense and complicate Chinese strategic calculations by expanding the scale and durability of any potential response.

The accompanying graphic demonstrates not only scale but trajectory. While U.S. naval tonnage has remained stagnant over the last 15 years, China’s has more than doubled. South Korea and Japan’s rates of growth make it clear that their shipbuilding ecosystems have remained dynamic, making them key partners in an American shipbuilding resurgence.

South Korea

South Korea hosts some of the world’s most capable and efficient shipyards and is second only to China. Firms such as Hanwha Ocean, HD Hyundai Heavy Industries, and Samsung Heavy Industries routinely deliver complex naval vessels at lower costs and faster timelines than U.S. yards. Their success rests on a comprehensive industrial ecosystem encompassing regional steel production, automation, lifecycle sustainment, and a deep pool of trained shipbuilding engineers.

Korea’s advantage is not only in cost and speed, but also in their advanced technical shipbuilding ecosystem. Seoul’s leading yards operate cutting-edge digitally integrated production systems that use 3D modeling and advanced simulation tools to improve workflow and enhance efficiency. Korea is prioritizing developing their technological advantage and government officials have pledged to spend over 320 billion won ($240 million) on artificial intelligence driven shipbuilding, a 23% increase from the previous year.

Cooperation is already expanding. Shipbuilding is a core element of South Korea’s strategic investment in the United States. Hanwha Ocean is investing heavily in its Philadelphia shipyard and exploring additional U.S. facilities, even as it pursues contracts with Canada that might help strengthen Hanwha’s massive Geoje shipyard that produces about 45 commercial and naval ships a year. Seoul’s decision to develop a nuclear-powered submarine represents a political breakthrough made politically conceivable by signals of greater U.S. flexibility on nuclear cooperation; with sustained U.S. support and a willingness to allow submarine production in South Korea, the SSN could deepen alliance industrial integration while advancing shared maritime capabilities.

Strategic alignment reinforces the case for cooperation. Both Washington and Seoul view China’s military modernization with concern and share an interest in stability in the Taiwan Strait. South Korea’s geography and industrial capacity make it a pivotal partner in any strategy to expand U.S. naval power, particularly given the strategic aim of defending the First Island Chain.

Japan

Japan, the world’s third-largest shipbuilder, offers complementary strengths. While its shipyards operate at a smaller scale than South Korea, they excel in precision manufacturing and systems integration. Mitsubishi Heavy Industries leads a group of seven major shipbuilders in Japan. Mitsubishi Shipbuilding was created in 2018 to bring cutting-edge technology and a new business model to building a wide variety of ships. Its shipyard at Nagasaki, founded in 1857 by the Tokugawa Shogunate, will build the first three Mogami-class frigates for Australia.  The Japan Maritime Self-Defense Force operates sophisticated warships incorporating advanced sensors, propulsion, and weapons, and Japanese yards have proven adept at integrating complex systems to exacting standards.

Cooperation has moved from concept to execution. U.S. naval vessels have already undergone maintenance in Japanese yards, establishing technical interoperability and operational trust. Agreements reached in late 2024, reaffirmed and substantially enlarged by President Trump and Prime Minister Sanae Takaichi, outline frameworks for expanded joint shipbuilding capabilities and potential co-production.

Japan’s strategic incentives are strong. Chinese military activity near Japanese territory has intensified, prompting Tokyo to accelerate defense spending and once again revise and update key national security documents. This political commitment provides a durable foundation for long-term industrial partnership. Prime Minister Takaichi’s landslide LDP victory in the lower house enhances Tokyo’s determination to strengthen alliance cooperation in general and defense industrial cooperation in particular.

Other Regional Partners

Other Indo-Pacific allies can provide vital supporting capacity. Australia’s participation in AUKUS (the Australia, UK, U.S. defense partnership) demonstrates allied willingness to make substantial, generational investments. Canberra’s pledge to invest $3 billion in U.S. submarine shipyards is among the most concrete steps toward revitalizing American undersea production capacity, and Australian yards may eventually contribute more broadly.

Southeast Asian allies and partners also matter. The Philippines, as a treaty ally and frontline state facing persistent Chinese coercion, is also ranked among the world’s leading shipbuilding nations by commercial gross tonnage. Thus, Manila can contribute beyond providing critical access through implementation of the Enhanced Defense Cooperation Agreement. Expanded development of Subic Bay could support forward maintenance and overhaul, especially as Manila grows its naval and coast guard forces. Korean investment has helped reopen the long-dormant Subic Bay shipyard, offering a potential hub for additional allied maintenance and repair. Japan is another critical source of maritime support and its acquisition and cross-servicing agreement with the Philippines thickens the web of cooperation among America’s key maritime allies.  

Together, these initiatives point to the emergence of an allied maritime industrial network across the Indo-Pacific, still uneven but increasingly consequential. While some leading regional analysts argue for formalizing this cooperation into a treaty-based Asian alliance, the more feasible and immediate task is to build the industrial sinews that would give any future alliance real weight in the form of shared production capacity, repair and regeneration capacity, and interchangeable shipbuilding and sustainment ecosystems. Industrial integration is not a substitute for alliance commitments, but it is the foundation that makes alliance commitments credible in crisis and resilient over time.

Current Partnerships and Their Limits

Existing initiatives underscore both promise and limitation. AUKUS is the most ambitious effort to date, while agreements with South Korea and Japan on repair, maintenance, and potential co-production reflect growing momentum. Yet these efforts remain fragmented and largely ad hoc. Many rely on waivers, pilot programs, or working groups without permanent institutional backing.

Even sanctioned initiatives face friction. The Korean-operated Philadelphia shipyard has encountered regulatory and workforce hurdles, illustrating the difficulty of scaling cooperation under current rules. Execution risk remains substantial. Regulatory friction, workforce constraints, and shifting political priorities on both sides of the Pacific could delay or derail even well-intentioned initiatives. Allies contemplating major capital investments remain uncertain whether U.S. policy will endure across administrations or whether cooperation will move beyond pilot programs and waivers. These risks do not weaken the case for allied shipbuilding integration; they strengthen it. Without early institutionalization, deterrence will rest on assumptions about capacity that may never materialize.

Areas for Cooperation: Destroyers

A U.S. fleet capable of countering China will require a strong destroyer fleet. Destroyers offer exceptional operational versatility through their anti-air, anti-ship, and anti-submarine capabilities. In describing the hedge force needed to confront China, Bryan Clark identifies the destroyer as a central element of the force mix because of its role in air and missile defense and in protecting other ships. As China expands its missile arsenals and extends their range, the United States must continue to build and expand its destroyer program to keep pace.

The Arleigh Burke-class destroyer (DDG 51), first commissioned in the early 1990s, remains the vital pillar of the U.S. surface fleet.  The United States currently has 74 of these destroyers in service, with 23 more hulls in the planning pipeline. Yet frequent cost overruns and delays make relying on this program alone a precarious bet. The ship has been repeatedly updated to meet changing needs, but these modifications have been imposed on a deteriorating industrial base. The result has led the Congressional Budget Office to conclude that average construction delays for the ship class have worsened significantly in recent years, with new ships now taking more than eight years to build. Meanwhile, China reportedly takes roughly two years to build its 52D destroyer and approximately three years for its more advanced Type 055.

While destroyers are crucial in a conflict against China, Beijing has more capacity to build these ships, and its advantage is only increasing. South Korea, however, is one of the world’s leading builder of destroyers. The Korean Jeongjo the Great-class destroyer is approximately one-quarter larger than the Arleigh Burke-class. The Korean destroyer also features a mix of U.S. and Korean systems on board which allow it to fire both long- and short-range missiles. Most impressive is the speed and cost with which South Korea has been able to build this ship. The destroyer was built in about three years. Secretary of the Navy John Phelan, noting the quick timeline, also observed that Korean shipyards can build this class at roughly a third of the cost of a comparable U.S. destroyer, attributing this performance to yard efficiency, workforce skill, and limited regulatory friction.

South Korea is thus a world leader in a military technology that the United States urgently needs. Working with Korea to reform U.S. yards, integrate Korean building techniques, expand co-production and licensing, and eventually purchase Korean-designed military technology will be key to developing the destroyer fleet that the United States requires.

Areas for Cooperation: Advanced Technologies

Another common criticism of U.S. shipbuilding is that the industry does not make sufficient use of advanced technologies to support the shipbuilding process. A report by the GAO found that naval shipyards have been slow to adopt digital modeling, planning tools, and other advanced technologies that can speed construction and reduce delays. Additionally, outdated equipment and reliance on labor-intensive processes rather than automation reduce U.S. efficiency. While there is a legitimate balance between preserving jobs and adopting new technology, both suffer if strategic objectives cannot be delivered on time and at scale.

Policymakers have identified increased automation as essential to improving shipbuilding effectiveness. Palantir Technologies has been working on a $448 million project to integrate AI into naval shipbuilding through the ShipOS initiative, and senior naval leaders have pledged to prioritize automation and digitalization in public and private yards. As the United States continues to develop these capabilities, South Korea and Japan should be treated not merely as investors or licensees, but as core partners.

Both South Korean and Japanese shipyards are renowned for leveraging cutting-edge technologies to improve efficiency. In South Korea, HD Hyundai is building a world-class digital shipyard that uses automation and digital modeling to enhance speed and precision; yards have begun using AI robots to weld, cutting down welding times by one-third in the process. Japanese shipbuilders employ similarly advanced 3D modeling and are investing in laser-arc hybrid welding and other techniques. South Korea and Japan have the tools and expertise to be key collaborators in identifying, developing, and deploying the technologies that will shape the future of naval shipbuilding.

As the war in Ukraine has shown, Soviet-era weapon systems and battle plans struggle to hold up in modern warfare shaped by cutting-edge technology, including AI-enabled systems and increasingly advanced requirements for speed, precision, and accuracy. In several of these areas, China faces limitations, while Korea and Japan possess notable strengths. For instance, China’s submarines have long faced criticism for acoustic noise. Meanwhile, Korean yards are building some of the most advanced conventional submarines, setting high standards for stealth and effectiveness. Working with allies to continue pushing the frontier of military technology is a valuable way to achieve economies of scale while leveraging some of the world’s most capable technical talent.

Naval shipbuilding integration would not be limited to destroyers or technology sharing. A U.S.-South Korean nuclear-powered submarine could ultimately be joined by Japan, too. Another project with lower hurdles would be an “Asian corvette” produced by the United States, Japan, and South Korea, with the aim of exporting the VLS-equipped, fast-attack vessel to help regional partners and ASEAN navies facing Chinese maritime coercion.

Barriers to Cooperation

Despite the potential for cooperation, two constraints loom largest. First, U.S. ambitions remain too narrow. Outside AUKUS, cooperation focuses mainly on maintenance, with limited progress on new construction, technology co-development, or integrated force planning. Second, legal and regulatory barriers deter sustained partnership.

The U.S. defense establishment lacks a single, empowered senior official responsible for international defense industrial cooperation. The 2018 reorganization of acquisition leadership, while intended to sharpen innovation and procurement, had the effect of diffusing authority across multiple offices. Allies were left without a clear counterpart for industrial coordination.

Even as South Korea, Japan, Australia, and other partners increase investment in U.S. and allied dual-use and defense industrial capacity, cooperation remains managed through existing channels within the Office of the Under Secretary of Defense/War for Acquisition and Sustainment. These mechanisms are functional but insufficiently empowered for the scale and strategic importance of emerging allied industrial integration. Expanding cooperation requires commensurate authority.

The Defense Innovation Board’s proposal to establish an Undersecretary of Defense for International Industrial Cooperation therefore merits urgent consideration. Shipbuilding may not be strategy, but a maritime strategy without a fleet will not sail. 

Statutory constraints–including the Jones Act and the Byrnes-Tollefson Amendment, which restrict foreign-built ships in U.S. domestic trade, and the International Traffic in Arms Regulations, which govern technology transfer–serve legitimate purposes but significantly hamper cooperation on hull construction, systems integration, and design data sharing. Case-by-case waivers, such as those granted under AUKUS, may suffice in the short-term, but they also create uncertainty and administrative burden that can hinder long-term success. Recent legislative proposals, including the SHIPS for America Act and the Ensuring Naval Readiness Act, offer partial relief and deserve prompt consideration.

Brent Sadler’s recommendations in Naval Power in Action rightly emphasize that restoring American sea power requires more than mere fleet modernization. He underscores the need to rebuild U.S. merchant shipping and shipyard capacity, while advancing a maritime alliance able to integrate industrial regeneration as deliberately as operational planning. This logic points toward a more comprehensive solution: establishing a “trusted shipbuilding partner” framework with allies such as South Korea and Japan, whose advanced shipyards, skilled workforces, and shared security standards make them natural anchors for allied naval production and sustainment. By streamlining contracting, enabling secure technology transfer, and aligning long-term production planning, such a framework would reduce friction, accelerate fleet regeneration, and transform allied shipbuilding capacity into a standing component of deterrence rather than an ad hoc supplement in crisis.

Conclusion

The United States faces a narrowing strategic choice. One path is to attempt to outbuild China domestically, but trends suggest that approach will fail. China’s shipbuilding dominance is the product of decades of focused policy and massive state-led investment. The United States cannot replicate that achievement on its own within the timeframe effective deterrence demands.

The alternative is to integrate allied shipbuilding more fully into American maritime power. The combined industrial capacity of the United States, South Korea, Japan, and other capable allies can match Chinese output while producing a force that is more resilient and adaptive over time.

Achieving this will require institutional reform, legal change, and sustained political commitment. Without such integration, however, the United States risks entering the 2030s with insufficient naval power to deter Chinese aggression, inviting the very conflict it seeks to prevent. With systematic allied integration, the United States can build the fleet required to maintain stability across the Indo-Pacific while strengthening alliances that are effective rather than entangling.

This is not about outsourcing responsibility. It is about aligning industrial reality with strategic necessity. Successful military alliances rest on shared goals, shared burdens, and shared decision-making. The purpose of integrated allied shipbuilding is not cooperation for its own sake, but the preservation of U.S. influence and therefore peace in the world’s most consequential region, what Nicholas Spykman famously described as the “Asiatic Mediterranean.”

A stronger homegrown U.S. shipbuilding and maritime industry remains essential. But domestic revitalization and allied integration are not alternatives; they are mutually reinforcing. A revitalized U.S. industrial base working closely with selected, capable, and willing maritime allies is indispensable to a strategy of deterrence along the First Island Chain. Understood in this light, allied shipbuilding is not optional. It is imperative.

Dr. Patrick M. Cronin is Asia-Pacific Security Chair at the Hudson Institute and a Scholar in Residence at Carnegie Mellon University’s Institute for Strategy and Technology (CMIST), where David Glick is a student.

Featured Image: Newport News, Virginia (Mar. 16, 2000) — The lower bow unit of the aircraft carrier Ronald Reagan (CVN 76) is lowered into place at the Northrop Grumman Newport News Shipbuilding facility. (U.S. Navy photo)

By CDR Chase E. Harding, USN

Introduction

The balance of power in the Indo-Pacific is shifting rapidly as China’s shipbuilding hegemony endures. With the U.S. shipbuilding base in decline, the United States must take bold action to remain a credible maritime power and uphold the rules-based order that has underpinned peace and prosperity in Asia for decades. This order could be strengthened by a trilateral collaboration that unites the United States, Japan, and South Korea in co-developing and mass-producing a new class of fast-attack missile corvettes. From the outset, these vessels would be designed with a clear value proposition for the high-end fight, while also being tailored for maritime domain awareness and maritime security. They would bolster allied naval capacity and serve as an exportable platform to support ASEAN partners on the frontlines of illicit activity, maritime coercion, grey zone warfare, and great power competition.

To realize this initiative, the United States must reform outdated laws, attract foreign direct investment into dormant shipyards, and fully leverage the industrial strength of its allies. Congressional action, including targeted exemptions from the Jones Act, Buy American Act, and the Byrnes-Tollefson amendment, will be essential to unlock collaboration at speed and scale. This bold strategy will counter the People’s Liberation Army Navy’s quantitative edge with a qualitatively superior, coalition-driven maritime force, restoring American sea power while promoting Indo-Pacific stability.        

The Collapse of American Maritime Power

Since the conclusion of World War II, the United States has embarked on a mission to protect global supply lines, project power abroad, and strengthen a rules-based order that would drive massive growth in the global economy —a feat not seen in human history.¹ This dominance was mainly at sea through the efforts of the U.S. Navy, which ensured freedom of the seas and adherence to this newfound order. Eight decades later, this dominance is being challenged as the Navy sails listlessly, if not rudderless, due to shrinking budgets, failed platforms, and floundering shipyards. During World War II, the Navy had almost 1,300 ships in service; by 2003, it had less than 300.²

As fleet numbers dwindled due to the peace dividend, so did America’s shipyards. Since the late 1950s, U.S. shipbuilding output has declined by more than 85%, and the number of shipyards capable of producing large commercial vessels has decreased by over 80%.³ The U.S. has gone from building almost 5% of the world’s ocean-going ships in the 1970s to just 0.1% today. For comparison, the People’s Republic of China, Japan, and South Korea make up almost 90% of global shipbuilding, with the PRC building the majority.⁴

The end of the Cold War marked the beginning of a sustained decline in America’s defense shipbuilding capacity. During the Cold War, the United States operated 11 shipyards dedicated to building naval combatants, but by 2005, seven shipyards were closed, and a once proud 70,000-strong workforce reduced to less than 30,000 workers (2012 estimate).⁵ U.S. shipyards continued to decline well into the 1990s and early 2000s as subsidies ceased, the labor market shrunk, geopolitical priorities shifted, and there was a significant lack of infrastructure investment.⁶ Currently, investment is so poor that there are not enough drydocks in the U.S. to support naval expansion. For example, one of the last publicly owned shipyards, Norfolk Naval Shipyard’s drydock number one, has been in use since before the Civil War. The newest publicly owned dry dock for the Navy was completed in 1962.⁷ When examining shipbuilding through a monetary investment lens, the US is woefully behind most nations, especially its primary strategic competitor. From 2010 to 2018, the PRC invested $132 billion in its shipbuilding capability, whereas the U.S. invested less than $80 million.⁸

Shipbuilding, shipyard infrastructure, and overall investment are not the only explanations for the Navy’s decline since the Cold War. The fault also lies with naval design and a failure of leadership to determine what the future Navy should look like. Programs like the Zumwalt class-guided missile destroyer and the Littoral Combat Ship (LCS) program proved to be a heavy burden to the Navy and some would say were simply the wrong ships for the wrong time.⁹ Both programs were a product of the post-Cold War shift toward power projection immediately faced significant challenges.

The Zumwalt, initially envisioned to replace the Ticonderoga-class cruiser, had cost overruns that ballooned exponentially to $8 billion per ship as the program was truncated to only three ships (for reference, a Ford-class carrier costs $13.3 billion).¹⁰ Additionally, the Zumwalt weapons systems, notably the 155mm Advanced Gun System (AGS) projectiles, cost $800,000 per round.¹¹ The LCS program was designed to be a “multi-mission jack of all trades” platform at a relatively affordable price. This affordability was more than $28 billion for 35 ships, with the Government Accountability Office (GAO) estimating that the cost of operating and maintaining the fleet throughout its lifespan would be upwards of $60 billion. Like the Zumwalt weapon system, the LCS’s combat effectiveness was inadequate. The Anti-Submarine Warfare package was canceled, and the Mine Hunting mission package was declared operational in 2023, 15 years after its development and a $700 million investment.¹² Many high-profile incidents at sea have plagued the LCS program as a whole, leading to many being decommissioned early; a notable example is USS SIOUX CITY (LCS 11), which was transferred to Foreign Military Sales (FMS) after just five years in service.¹³

In 2017, naval leaders shifted their focus back to building traditional guided missile frigates (FFGs) to keep pace with rising threats, notably from the PRC. The Navy opted to use the FREMM frigate design currently employed by the Italian and French Navies. With almost 85 percent similarities, the FREMM offered the U.S. Navy a reliable platform with established supply chains and interoperability with European partners. Unfortunately, shaping the FREMM design to meet Navy survivability and growth margin requirements required extensive modification. The result was a design that accounts for barely 15 percent of the original.¹⁴ The former Assistant Secretary for Research, Development, and Acquisition Nickolas Guertin remarked, “Sometimes, you are just better off designing a new ship. It turns out modifying someone else’s design is a lot harder than it seems.”¹⁵ Workforce shortages at U.S. shipyards and a lack of design maturity have compounded the Constellation class frigate’s challenges. The lead ship was not expected to enter naval service until 2029, almost three years late, and at a cost of $1.4 billion.¹⁶ Meanwhile, America’s strategic competitor continues to grow the world’s largest Navy.

The Rise of PRC Shipbuilding Hegemony

The PRC’s ascent as a shipbuilding hegemon is a testament to its meteoric rise as an economic powerhouse. China’s defense industrial base, notably shipyards, has undergone an unprecedented transformation, making China the world’s premier shipbuilder. With dual-use (civilian-military) shipyards, the PRC has 230 times the shipbuilding capacity of the United States, meaning it could produce 23 million tons of vessels compared to less than 100,000 tons in the U.S.¹⁷ The People’s Liberation Army Navy (PLAN) has been one of the greatest beneficiaries of this transformation. Since the end of the Cold War, the PLAN has rapidly evolved from a mere coastal defense force to the world’s largest blue water Navy.

Since 2010, the PLAN has undergone significant modernization, with over 70 percent of its fleet comprising newly commissioned vessels, including corvettes, frigates, destroyers, cruisers, submarines, and aircraft carriers. This rapid pace is evident in the larger shipbuilding apparatus, with China launching more ships than any other country in recent memory.¹⁸ While the PLAN’s aircraft carrier program has garnered significant attention, the more critical observation is its rapid production of multiple surface combatants with advanced anti-ship missile capabilities. The Type 055 Renhai-class cruisers, Type 052D Luyang III Destroyers, the Type 054B Jiangkai III-class frigates, and the Type 056 Jiangdao Corvette represent formidable additions to China’s naval arsenal. The Renhai-class, in particular, is equipped with 112 vertical launch system (VLS) cells capable of firing a variety of missies, including long-range anti-ship cruise and ballistic missiles such as the YJ-18 and YJ-21.¹⁹

The type 054B represents a significant upgrade from the PLAN’s Jiangkai series workhorse FFGs, each having a VLS of 32 cells and eight dedicated launchers for anti-ship cruise missiles such as the YJ-83.²⁰ The smaller Jiangdao corvette, meanwhile, tailored for Anti-Submarine Warfare (ASW) operations is capable of disrupting U.S. undersea dominance in addition to “punching above its weight” when equipped with YJ-83 anti-ship cruise missiles is cause for concern.

While it is clear that American shipbuilding capacity is at a numerical disadvantaged, a common argument persists that the U.S. has far superior quality in terms of overall ship size (measured in tonnage) and can employ far more missiles than the PLAN.²¹ While the aggregate displacement of PLAN ships is a little more than a third of the U.S. Navy, and with approximately 9,900 vertical launch system (VLS) cells compared to China’s 4,200, the U.S. holds a slight “advantage.” However, this gap is narrowing at an alarming rate.²² Beyond a VLS numbers game, the PLAN has already surpassed the U.S. fleet size, boasting over 370 ships as of 2024 compared to America’s 296 ships as of 2025, and is projected to reach 475 battleforce ships by 2035.²³ This quantitative advantage cannot be dismissed, as history has shown that numerical superiority often proves decisive in combat. In an analysis of naval engagements ranging from the Peloponnesian Wars to the Cold War, only three out of a possible 28 engagements have seen a lesser force with superior technology overcome a fleet with superior numbers.²⁴

The notion that quality will inevitably triumph over quantity is both naïve and dangerous. In some critical areas, such as anti-ship missiles, the United States is already behind: the U.S. surface fleet largely relies on the SM-6 with a range of 150 nautical miles, while the PLAN fields the YJ-18 (300 nm) and the YJ-21 hypersonic missile (est. 540-810 nm), not to mention Chinas large arsenal of anti-ship ballistic missiles.²⁵ As the PRC continues to expand the worlds largest fleet while narrowing or surpassing the U.S. in key technologies, the United States must reassess its naval strategy. This begins with partnering with allies Japan and South Korea and leveraging the full weight of the trilateral alliance to co-develop and field fast-attack missile corvettes.

A Collaborative Approach

The challenges facing the United States and the shifting balance of power in the Indo-Pacific demand a fundamental reassessment of current maritime strategy. The U.S. can continue claiming it is the dominant maritime force only if it speaks historically. With declining shipbuilding capacity, failed platforms, and the PLAN’s continuing naval growth, a bold new maritime strategy fostering collaboration and innovation is needed. Continuing on the current course risks ceding further power and influence to the PRC, undermining regional stability and American interests. This collaborative approach must leverage the strength and quality of our premier Asian allies, Japan and South Korea. These nations possess innate shipbuilding expertise and share a vested interest in countering the PRC’s coercive and aggressive behavior.

Undeniably, the PRC has established itself as the global leader in merchant shipbuilding. In 2022, the PRC produced 1,794 ships.²⁶ By 2024, it had 61.4 percent of the worldwide market, including 55 percent of backlog orders, equating to approximately 2,539 ships, positioning itself well for future shipbuilding initiatives.²⁸ While Japan currently accounts for only 15 percent of the global market, it was still able to secure and fulfill orders for 587 large commercial vessels at the end of 2022.²⁸ The Japanese Maritime Self-Defense Force (JMSDF) was able to procure multiple naval surface and subsurface combatants through the combined efforts of Mitsubishi Heavy Industries (MHI), Kawasaki Heavy Industries (KHI), and Japan Marine United Corporation (JMU).²⁹ South Korea meanwhile accounts for 28 percent of the global market and produced 734 large commercial ships by the end of 2022.³⁰ The combined efforts of both Hyundai Heavy Industries (HHI) and Hanwha Ocean enabled the South Korean Navy to procure upwards of ten naval surface vessels per year, in addition to providing a corvette/frigate export variant to the Philippines on budget and five months ahead of schedule.³¹ Meanwhile, Japan has taken a similar export approach with the inking of a deal to provide 11 Mogami class frigates to the Australian Navy. The first three will be built by Mitsubishi Heavy Industries in Japan, while the remaining eight will be homegrown by Austal in Western Australia with the first frigate expected in 2029.³²

Combined with U.S. production at just 0.1 percent, the tri-lateral accounts for 43.1 percent of the worldwide market.³³ With Japanese and South Korean FDI and a renewed U.S. commitment to shipbuilding through Congressional action, the tri-lateral global market share could reach as high as 53 percent.³⁴ Collaboration between industry-leading Japanese and South Korean shipyards, such as MHI and HDHI, with renewed investment in declining American shipyards, offers a rare opportunity to disrupt Chinese shipbuilding hegemony and global influence.

The Tri-Lateral Solution: A Corvette for Asia

Collaboration in shipbuilding is no easy venture for any country, let alone three. It demands a compelling vision of what future conflict will entail, what type of naval combatant is required to prevail in said conflict, and the necessary resources to build at speed and scale. The United States, in particular, is running up against the clock, resource-constrained, and recovering from programs such as the LCS, Zumwalt, and the cancelled Constellation-class frigate.

Collaborative shipbuilding presents a strategic opportunity to act as we move increasingly closer to the “Davidson window” in which the U.S., Japan, and South Korea can accelerate naval production before the PLAN consolidates its quantitative and qualitative edge. Tri-lateral collaborative shipbuilding presents a common sense approach regarding ship design, procurement, and deployment. The idea of collaborative shipbuilding utilizing the tri-lateral alliance is not unique across the literature. Varying journal articles have advocated for a “JROKUS” architecture, in which Japan and South Korea assist the United States in building ships, notably a vessel based on the Arleigh Burke-class destroyer.³⁵ The U.S. provided Japan and South Korea with the fundamental design for the U.S. workhorse, the Arleigh Burke, which both countries adapted and built to meet their respective requirements. For instance, the Japanese Maritime Self-Defense Force has fielded the Maya class DDG. In contrast, the ROK Navy has developed the Sejong the Great class, which utilizes both the Aegis Combat System and an American Mk 41 Vertical Launch System (VLS) design.

While building a class of vessels with a standard blueprint is valid, it negates cost, time, classified technology, and other special considerations. If the U.S. Navy aims to “put more players on the field,” smaller, cost-effective corvettes built at scale are viable.³⁶ When built in the United States, the average cost of an Arleigh Burke destroyer is upwards of $3 billion. Even if Japan or South Korea could halve those costs to $1.5 billion or less and get the ship off the assembly line more quickly, the pace of production may still be eclipsed by China’s and not make a meaningful difference in the regional naval balance.

One possible design consideration is to use the Russian Steregushchiy III class as a template for a hybrid corvette design between the U.S., Japan, and South Korea. The Steregushchiy balances firepower, maneuverability, survivability, and a shallow draft within a small displacement, employing a 12-cell Redut VLS for medium-range surface-to-air missiles, anti-ship missile launchers, and layered defensive systems. Japan and South Korea could blend elements of the Steregushchiy with Japan’s Mogami-class and South Korea’s FFX Batch III program, integrated with the Mk 41 Vertical Launching System (VLS). The Mogami-class contributes stealth and advanced sensor capabilities, while the FFX Batch III provides survivability and flexibility to accommodate evolving mission requirements, such as maritime domain awareness systems and unmanned aerial or surface vehicles. Integration of a 24-32 cell Mk 41 VLS would provide multiple options to employ long-range surface-to-air, anti-ship, and anti-submarine missiles carried by destroyers without sacrificing the cost. Furthermore, a VLS-equipped corvette introduces a capability the PLAN does not possess at this weight class.

Mass-producing such corvettes would not only distribute significant naval fires across the first island chain but would also directly expand the U.S. and allied VLS inventory at scale. Finally, each new corvette’s ability to mask loadouts introduces operational uncertainty further complicating PLAN operations throughout Asia.

Pursuing a new collaborative ship design based on the input of Japan, South Korea, and regional partners does not have to be an arduous process. The European Union, specifically Italy, France, Spain, Greece, and Norway, have all agreed on a design for a European Patrol Corvette or “EPC” in which each country will utilize its supply chains, shipbuilding technologies, and common procurement strategies to build and outfit the vessel in multiple European shipyards.³⁷ The seriousness of building a ship based on a new design is critical, especially given the challenges of the Constellation class, in which significant costs were incurred in design modifications.

In estimating the cost, size, and production timeline of a trilateral VLS-capable corvette, the European Patrol Corvette (EPC) provides a useful benchmark. EU member states anticipate a prototype by 2026–2027 after the critical design review was completed in 2025, with operational units expected to enter service around 2030. Projected costs, based on 2021 figures, range from €250–300 million per vessel.³⁸ If the United States, Japan, and South Korea pursued a joint program leveraging Japan’s Mogami-class design and South Korea’s FFX Batch III program, the path from design maturity to fleet operations could reasonably fall within a 5–10 year window, depending on the agreed production scale. A target of 10–12 hulls is realistic, given Japan’s current ability to deliver two Mogami-class ships annually and Hyundai Heavy Industries’ steady pace of delivery for both the ROK Navy and export customers.³⁹ Assuming a 10-year horizon and costs in the range of $275–325 million per ship, the trilateral initiative could field 10–12 corvettes by year twelve, with the potential for even greater output if dormant U.S. shipyards were reactivated. The projected timeline would include 0–4 years for collaboration and design, with lead ships arriving in years 4–6 (consistent with EPC estimates), followed by serial production ramping up from year six onward.⁴⁰

The tri-lateral alliance is strategically positioned to provide corvettes to the Association of Southeast Asian Nations (ASEAN), leveraging Asia-based shipbuilding to optimize procurement efficiency, supply chain management, and a “built-in Asia for Asia” mindset. This approach could reduce delivery times and promote collaboration amongst ASEAN nations in the corvette design process. Japan and South Korea, meanwhile, stand to gain significant strategic influence within ASEAN and the broader Indo-Pacific through this initiative. Simultaneously, U.S. participation in the tri-lateral Corvette design offers its Asian allies greater strategic flexibility while reaffirming America’s commitment to ASEAN and the broader Indo-Pacific region.

Congressional and Legal Hurdles

Multiple bills have been introduced regarding the use of foreign shipyards and foreign investment, notably the bipartisan SHIPS Act sponsored by Sens. Mark Kelly (D-Arizona), Todd Young (R-Indiana), and Reps. John Garamendi (D-California) and Trent Kelly (R-Mississippi).⁴¹ The second bill introduced by Senator Mike Lee (R-Utah) and Senator John Curtis (R-Utah) seeks to implement the “Ensuring Naval Readiness Act.”⁴² Both sets of bills introduced in 2024 and 2025 have substantial merit in providing ships for the United States. The SHIPS Act seeks to rejuvenate America’s declining shipyard infrastructure amidst the rise of the PRC’s posture. Specifically, the bill calls for a Strategic Commercial Fleet of 250 US-flagged commercial ships to support international commerce and supply U.S. and allied forces during times of war.⁴³ During this buildup, the SHIPS Act allows for interim foreign-built vessels within this strategic fleet until US-built vessels can relieve them.

Additionally, the act will expand the U.S. shipyard industrial base for civilian-military dual-use operations (perfected by the PRC) by establishing a 25 percent tax credit for shipyard investments and financial incentives to support innovative approaches to U.S. domestic shipbuilding capabilities.⁴⁴ The Ensuring Naval Readiness Act is more specific to the construction of U.S. combatants abroad. The bill states that to achieve a 381-ship Navy, Congress must allow the option to construct vessels, components, or modules in shipyards of Indo-Pacific nations with which the U.S. has mutual defense agreements.⁴⁵

While both bills have considerable merit, especially regarding the possibility of building a common fast-attack corvette among the Tri-Lateral partners, there are still significant hurdles that Congress must continue to overcome. Should the SHIPS Act and the Ensuring Naval Readiness Act be codified into law, other federal interlocking statutes remain in place that can quickly dampen any shipbuilding revolution. Notably, the Jones Act of 1920, the Buy American Act of 1933, the Defense Production Act of 1950, and the Berry Amendment. While the Ensuring Naval Readiness Act amends United States Code (USC) Title 10 section 8679 to “allow” for naval ships to be built abroad, it lacks significant substance concerning multiple federal laws. The Jones Act of 1920 requires that any ship sailing between U.S. ports be built in the United States and owned and operated by U.S. citizens or permanent residents, which complicates the goal of a strategic commercial fleet.

The Buy American Act (concerning naval combatants) requires that significant components and funds allocated to naval vessels can only be used for fabrication within the U.S. This act alone directly contradicts the Ensuring Naval Readiness Act, allowing the construction of naval combatants in foreign shipyards. Finally, the Defense Production Act of 1950 could hinder the building of ships overseas. While not explicitly limiting the construction of naval combatants abroad, it does focus significantly on strengthening the domestic industrial base, which could discourage overseas efforts in shipbuilding.⁴⁶ Additionally, the Berry Amendment (preference given to domestically produced goods) and a 100% “Made in America” by 2033 clause within the NDAA have imposed restrictions on foreign-made components from allied nations, complicating a collaborative shipbuilding approach.⁴⁷ Furthermore, the Byrnes-Tollefson Amendment prohibits foreign companies from constructing hulls or superstructures for navy ships, causing another detrimental hurdle to a U.S. shipbuilding revolution.⁴⁸

Conclusion

The strategic imperatives facing the United States, Japan, and South Korea demand immediate, decisive action to secure enduring maritime security across the Indo-Pacific. Trilateral collaboration in naval shipbuilding is no longer optional, it is necessary. Together, the alliance has a once-in-a-generation opportunity to counter China’s expanding naval power, restore American shipbuilding strength, and ensure a free and open Indo-Pacific for decades to come. By pooling resources, expertise, and industrial capacity, the alliance can design and produce a fast-attack missile corvette tailored to the region’s urgent needs: maritime domain awareness, deterrence, and enhanced interoperability among allies and partners. A corvette fleet, built with Asian shipyards and American innovation, will empower ASEAN partners on the frontlines of maritime coercion, illegal activities, grey-zone conflict, and Great Power Competition.

Swift legislative action must accompany this vision. Congress must urgently amend outdated laws, including the Jones Act, the Buy American Act, and the Byrnes-Tollefson Amendment, to unlock foreign direct investment, reactivate dormant U.S. shipyards, and reestablish American leadership in global shipbuilding. Streamlining procurement processes and embracing trilateral trade rules can significantly reduce costs, expedite production timelines, and position the new fleet for phased deployment before China’s projected military advantage reaches its apex later this decade. This strategy offers more than ships. It redistributes burden-sharing among allies, strengthens alliance unity under the 2023 Camp David Accords, and demonstrates a clear commitment to defend freedom in the Indo-Pacific. It also signals that the United States and its allies have learned from past naval procurement failures — and are now prepared to innovate, adapt, and lead once again.

Restoring sea power through this trilateral initiative is both an opportunity and a strategic necessity. Success will reaffirm U.S., Japanese, and South Korean leadership in safeguarding the maritime commons, strengthening the global rules-based order, and securing American interests throughout the twenty-first century.

Chase Harding is a Strategic Planner at United States Forces Japan and a former Political-Military Master’s Scholar at the Fletcher School of Law and Diplomacy at Tufts University. The views expressed herein are those of the author and do not necessarily reflect the official policy or position of the Department of the Navy, Department of War, or the U.S. Government.

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Featured Image: Ticonderoga-class guided-missile cruiser USS Chancellorsville (CG 62) along with Japan Maritime Self Defense Force (JMSDF) guided-missile destroyer JS Chokai (DDG 176) and Republic of Korea Navy guided-missile destroyer ROKS Sejong The Great (DDG 991) conduct a trilateral Ballistic Missile Defense (BMD) exercise in the Sea of Japan. (U.S. Navy photo)

By Doug Orsi

The results of a 2023 wargame simulating a Chinese amphibious invasion of Taiwan showed that the combined forces of Taiwan, Japan, and the U.S. successfully denied Chinese objectives and defeated the invasion. However, multiple aircraft carriers and dozens of cruisers and destroyers were lost. Additionally, critical munitions needed to defeat Chinese forces were rapidly depleted due to limited magazine capacity and delayed logistics support. Current events in Ukraine, Russia, and the Middle East have confirmed the wargame’s conclusions as prescient, revealing the U.S. defense industrial base struggles to support the nation’s military commitments and policy goals. As a result, although the country still produces advanced systems and munitions, it lacks the capacity to replace material losses and expenditures during prolonged combat. The country must promptly address these issues by expanding policies, authorities, investments, and partnerships with like-minded nations that foster co-manufacturing, maintenance, and knowledge sharing in the construction of combat platforms to compensate for existing industrial base deficiencies.

Atrophy and Sounding the Alarm

The health of the defense industrial base is vital to the success and sustainability of military campaigns. In 2024, a bipartisan Commission on the National Defense Strategy found that the defense industrial base “is unable to meet the equipment, technology, and munitions needs of the U.S. and its allies and partners.” Through inattention, flawed policy, and poor strategic decisions, the U.S. allowed its defense industrial base to atrophy. The decline of the defense industrial base also included years of neglect of government-owned facilities, which served as the purveyor for the military’s higher-end modernization priorities.

An examination of current shipbuilding capacity highlights the challenge: a country’s ability to produce commercial ships also enables it to build warships. In the 1970s, the nation constructed 5% of the world’s commercial ocean-going vessels, but today that figure has fallen to less than 0.2%. Currently, the U.S. Navy relies on seven shipyards to build large warships and is decommissioning ships faster than it commissions new ones. This situation, along with rising costs for new warships and delays in production, indicates an impending crisis due to insufficient capacity to expand the fleet and quickly repair ships damaged during wartime. 

Previous administrations recognized the challenges posed by China and Russia and took steps to revitalize manufacturing. In 2017, President Trump signed an executive order calling for a health assessment of the defense industrial base. This was followed by the Biden administration’s review of ways to strengthen supply chain resilience and U.S. manufacturing. The war in Europe prompted the U.S. to accelerate plans to address issues in the industrial base. 

Responding to the Russian invasion of Ukraine, the U.S. Army quickly increased funding to boost the production of 155mm artillery ammunition. Although these efforts demonstrated that the country could accelerate production, the pace was still insufficient to meet demand during large-scale combat operations. Another challenge to munitions replenishment is the expansion of U.S. weapon systems and munitions acquired through Foreign Military Sales, Direct Commercial Sales, and Presidential Drawdown Authority. While these authorities and sales benefit the industrial base over the long term, potential short-term supply shocks, such as allied and partner use in Ukraine exceeding production capacity for 155mm artillery munitions, are concerning. One way to address these shortages is by expanding existing authorities, policies, and strategies. 

A Means Forward

The Defense Production Act of 1950 is a tool for Presidents to prioritize, expand production, and protect private companies from foreign mergers and takeovers to bolster national defense. The Act’s Title III authorities support production capacity by funding critical materials, technology, and workforce development. However, years of neglect and offshoring will require significant capital investments to reverse deindustrialization in steel production, manufacturing, and mining.

One approach is to increase the amount of Defense Production Act (DPA) Title III funds, focusing on specific areas of the defense industrial base that support large-scale combat operations. This includes funding for workforce development, munitions facilities, mines for strategic and critical materials, and expanding shipyards. A recent example is the Title III award to two companies that enhanced the capability and capacity of solid rocket motors, a critical component of precision-guided munitions. In 1992, Title III was amended to include Canada as part of the domestic industry, enabling the allocation of funds. Further expansion of Title III occurred in 2024, with the addition of the United Kingdom and Australia. 

Current and future administrations must keep expanding relationships with allies and partners to strengthen the defense industrial base. Considerations should include their capabilities, capacity, and strategic location. For example, Indo-Pacific ally New Zealand is modernizing its military through its existing industrial base and “closer defense relations” with Australia. New Zealand’s efforts align with the Five Eyes intelligence-sharing alliance and the National Technology and Industrial Base framework. Japan, another technologically advanced long-term regional ally, can assist and reinforce the U.S. through co-production enabled by recent defense investments and shipyard initiatives. Another longstanding ally, Norway, already co-produces the advanced Naval Strike and Joint Strike Missiles and is building another facility in the U.S. Including these nations among those eligible for Defense Production Act funding will improve the capacity to expand domestic and allied magazine depths in the Indo-Pacific and European regions. 

The National Technology and Industrial Base (NTIB) exists to support a “more robust domestic defense industrial base” through “dual-use research and development (R&D), production, maintenance, and related activities.” Established from experience in World War II and codified into law in 1993, the initial agreement between the U.S. and Canada has now expanded to include the United Kingdom, Australia, and New Zealand. Extending the NTIB to other countries, such as Japan, South Korea, and European allies like Norway, can bring benefits, including increased production and maintenance efforts, especially in areas where the U.S. faces shortages, such as munitions and shipbuilding. This may involve more joint production projects, overseas and within the U.S. The upcoming National Security Strategy should also highlight the importance of strengthening the defense industrial base, which will help guide Congress and the Department of War’s budget priorities.

The U.S. also needs to address domestic tool and machinery manufacturing to support the defense industrial base. For example, the U.S. purchased production equipment from Turkey to expand its 155mm munition manufacturing. Five-axis CNC machines used in advanced manufacturing are now mostly foreign. Investments in precision machinery are expensive, and their return on investment depends entirely on the amount of work expected. A way to improve this is to incorporate more multi-year contracts into defense deals to motivate the industry to invest in its factories and modernize, thereby stabilizing demand and revenue. 

The 2023 National Defense Industrial Strategy promoted risk reduction by increasing cooperation with allies and partners in areas such as sustainment, supply chain management, maintenance, repair, and overhaul, and by enhancing interoperability through sharing science and technology. The strategy’s Implementation Plan included “co-development and co-production of priority defense systems” with allies and partners as a key effort. The Department of War’s recently published Acquisition Transformation Strategy calls for the Department to “engage with allied Nation’s Industry partners for technology assessment, integration, and procurement, driving research, development, test and evaluation (RDT&E) expenditure reductions and worldwide supply chain diversification.” The U.S. government should not delay implementation and must start working with key stakeholders to advance this initiative and achieve improvements in industries. A crucial initiative should create more opportunities for non-defense domestic companies and allies to help address industrial base deficiencies. For example, America’s latent automotive industrial strength was once tapped to build aircraft and armor.

Allies & Partners

The U.S. has historically relied on allies to address its deficiencies in domestic mining, processing, and refining of raw materials essential to national defense. In 2021, Australia, the United Kingdom, and the U.S. established an “enhanced trilateral security partnership,” more commonly known as AUKUS. It aims to “promote deeper information sharing and technology sharing; and foster closer integration of security and defense-related science, technology, industrial bases, and supply chains.” AUKUS Pillar One enables Australia to develop nuclear-powered attack submarines. Pillar Two ensures interoperability through technology sharing, including artificial intelligence, hypersonics, electronic warfare, and command-and-control systems. Recent remarks by President Trump reaffirm his ongoing support for this partnership and the need to expedite deliveries. However, without substantial investments from all three partners, submarine production will not accelerate enough to meet the required timelines. The U.S. needs to expand Pillar Two to strengthen workforce, supply chain, and infrastructure capacities that affect current submarine, joint platform, and munition production. 

Expanding joint production overseas with allies and industrial partners is a way to reduce current capacity strain on combat platforms and munitions manufacturing; however, how it is implemented is crucial. For example, the F-35 Lightning II program shows poor use of allied co-production. The program is hindered by the aircraft’s complexity and by production delays caused by parts shortages, stemming from supply chains optimized for efficiency rather than capacity. Also, manufacturing was spread globally to encourage partner cooperation and sales. This model of co-production is a poor example to follow for similarly complex systems. A better approach is to focus on smaller programs and simpler systems, such as infantry fighting vehicles or munitions, prioritizing redundant capacity over efficiency. The joint ventures between Raytheon and the European missile manufacturer MBDA to produce Patriot munitions in Germany, and between Lockheed Martin and Thales Australia to produce Guided Multiple-Launch Rocket System missile components, are excellent examples. These show how leveraging local industrial capacity can help ease near-term strain on high-demand platforms, munitions, and combat components.

Growing Fleets

The shortage of U.S. shipyards and repair facilities presents a dilemma should a kinetic conflict with China occur in the Pacific. Although the U.S. prevailed in the wargame, the heavy losses in personnel and resources made it a Pyrrhic victory. The decline of shipbuilding in the U.S. is well documented and not the focus here. While this situation is concerning, there is some reassurance that many allies and partners, including Japan, South Korea, and Italy, maintain strong shipbuilding industries. The challenge with leveraging allies’ capabilities is that current law prevents the nation from purchasing warships from foreign shipyards. Title 10 USC 8679 states:

“Except as provided in subsection (b) [Presidential Waiver for National Security Interests], no vessel to be constructed for any of the armed forces, and no major component of the hull or superstructure of any such vessel, may be constructed in a foreign shipyard.”

Although Japan and South Korea have strong commercial and naval shipbuilding abilities, they are close to China and its vast arsenal. European countries, such as Italy, also have domestic shipbuilding capabilities that the U.S. could leverage to address this issue.

The President, members of Congress, and key stakeholders are doing their part to develop policies and legislation to address the shipyards issue. The recent executive order, “Restoring America’s Maritime Dominance,” directs actions to “ensure the Security and Resilience of the maritime Industrial Base,” including the use of Defense Production Act Title III and other investments to support the commercial and defense shipbuilding industries. Other congressional efforts include the bipartisan Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act (SHIPS Act), which aims to improve the nation’s ability to produce commercial ships and their related infrastructure. The bill “calls for the U.S. to add 250 ships within the decade to the international fleet of U.S.-flagged vessels…” Congressional support is crucial for expanding shipyard capacity and introducing new innovative manufacturing capabilities that allies possess. Reinvigorating commercial shipbuilding is a positive step that can create more jobs, which can then be used for military construction. 

The shortage of qualified workers is affecting the nation’s shipbuilding and submarine-building industries. An example of these challenges is the Gulf Coast region’s 5,000-worker shortfall needed to support new Navy contracts. Similarly, the Navy indicated that “workforce challenges and material shortfalls” are causing scheduling issues for refitting nuclear aircraft carriers. This lack of capacity now prevents the repair or production of ships at the speed and scale needed during wartime. The Biden administration and Congress sought to leverage the strengths of regional allies and partners to bridge these gaps.

Expand Overseas Maintenance

The Department began making some headway in addressing maintenance operations for ships and systems serving overseas. The 2024 Regional Sustainment Framework, which advocates forward maintenance, repair, and overhaul operations in allied nations rather than at home, is a first step toward addressing maintenance downtime. In the past, a damaged ship was brought back to a stateside government or commercial repair facility. Under this new framework, five regional sustainment centers will conduct maintenance and repair work in the Indo-Pacific, with European yards also considered. This is a positive first step that acknowledges modern capabilities and increased capacity of allies and partners, and can serve as a stepping stone to increase readiness rates, especially in the area of deferred maintenance by the U.S. Navy. The challenge with the recent maritime executive order, which focuses on rebuilding America’s naval and commercial shipping, is that it will take years to implement before stateside facilities can increase capacity to improve fleet readiness and expansion.

The U.S. readily acknowledges that Japan, South Korea, and Europe design and produce excellent warships. The development of the U.S. Navy’s Constellation-class Frigate Program is off plan, but the idea of using a mature, existing allied frigate design and modifying it slightly has merit, regardless of its implementation woes. Despite the program’s multiple challenges, the need for modern allied capabilities and capacity, especially in shipyards, remains.

The Next Steps

There is a compelling case for the country to involve allies and partners in co-production with direct investment and potential purchases of subsystems and components, given America’s current inability to recover from wartime losses. Recent comments from the White House show that the time may be right for this approach. According to media reports, President Trump stated, “…we may buy some ships from other countries that we’re close to and do great jobs with ships.” Recent analysts have proposed purchasing Arleigh Burke-class destroyers from allies to expand the Navy’s fleet while rebuilding its own shipbuilding infrastructure. This is a politically sensitive position, as American shipyard workers, their advocates, and citizens would argue it is harmful to the U.S.

There are valid reasons for protecting the nation’s shipbuilding industry and its workforce. There is also the fear that foreign security services are gathering intelligence on technology, tradecraft, vulnerabilities, and the sabotage of overseas production. Times have changed, and if the nation were to face large-scale combat operations as described earlier, the ability to reconstitute losses must be realistic and viable. The U.S. government must lean forward and assist new domestic companies interested in entering the defense industrial base, while expanding existing critical infrastructure and cybersecurity programs for allies who can rapidly enable gains in weapon production, shipbuilding, and repair. Intelligence sharing—an Achilles’ heel in coalition environments—must also be streamlined and expanded to assist our allies and partners and capitalize on their existing strengths.

America’s ability to incorporate non-defense businesses into the war industry was a crucial factor in winning the production effort during WWII. Encouraging firms that can weld, cast, stamp, direct-mold injection, or produce glass to shift into supply chains for combat vehicles, missiles, munitions, drones, optics, and shipbuilding will quickly boost capacity. A racing company that specializes in Motocross can make parts for defense aerospace. An automotive dashboard supplier can adapt their direct-mold injection process to produce drone housings. Because of limited space, many U.S. shipbuilders are utilizing outside facilities to manufacture ship components and then transport them to shipyards for final assembly. This approach can be further improved by involving more non-traditional firms in the production of shipbuilding modules or components, and transporting these modules or components to shipyards for final assembly. Instead of bringing skilled labor to the shipyards, as was done during WWII, distributed manufacturing and on-site installation will expand U.S. shipyard capacity by leveraging dispersed resources. Such efforts can help revive a U.S. industrial core devastated by decades of deindustrialization, transforming Rust Belts into ‘Gold Belts.’

The way forward is to continue seeking direct investment from allies in areas where they have excess capacity. South Korean shipbuilder Hanwha Ocean’s recent purchase of Philly Shipyard and its projected $5 billion investment are positive steps toward revitalizing a moribund commercial shipbuilding market and could lead to naval repair opportunities. Additionally, the Department must collaborate with the government and key stakeholders to secure a Presidential waiver to purchase ship components from important allies, such as Japan, South Korea, or Italy. 

A logical next step is to seek assistance in building Navy fleet auxiliary ships. The outcomes of this initial step could lead to further agreements to purchase components for warships from allies and transfer them to U.S. facilities, where they would be fitted with the necessary weapons, information, and cyber systems to make the ships operational and secure. This assistance is a more acceptable option for the nation and would help speed up current delays in domestic naval shipyards. The Department could mitigate risk by deploying inspectors and personnel at overseas production facilities to help ensure security and maintain the integrity of the manufacturing process. 

Allies and partner nations play a crucial role in helping the U.S. quickly regain its ability to produce combat platforms and essential munitions. The Commission of the National Defense Strategy advised “allowing the Department of Defense to supplement defense production with procurement from allies and partners with advanced manufacturing capability and capacity.” The Department must follow this approach until U.S. industries can meet the country’s needs. China’s shipyards and factories far surpass U.S. capacity to mass-produce both weapons and commercial and military ships, and they are advancing in both sophistication and quality. 

Conclusion

The U.S. defense industrial base has limited capacity to rapidly increase production in the event of large-scale conflict against a peer competitor, and global commitments further widen these gaps. The U.S. should consider seeking allied assistance by expanding DPA Title III funding and NTIB membership, thereby strengthening the industrial base both domestically and internationally through increased overseas joint munitions production. Production priority must focus on munitions with the highest demand signals during kinetic conflicts in the Indo-Pacific, ongoing conflicts in Europe, and in the Middle East. These steps will give the nation time to scale up its production capacity to a sustainable level. Not only will allied and partner facilities improve readiness and keep systems forward-deployed during hostilities, but their investments and expertise will also support the expansion of U.S. shipyards and maintenance facilities. Targeted procurement of components from key allies with superior capabilities and capacity will rapidly grow the fleet, facilitate victory, and reduce combat losses. Without these measures, the U.S. risks being unprepared if deterrence fails, jeopardizing American ideals and way of life.

Doug Orsi is a retired Army Colonel serving as an Assistant Professor at the U.S. Army War College with research interests in the defense industrial base, mobilization, and industrial preparedness. The views expressed in this article are those of the author and do not necessarily reflect those of the U.S. Army War College, the U.S. Army, or the Department of War.

Featured Image: Virginia-class submarine, USS Arkansas, under construction. (Photo via Wikimedia Commons)