(Zero Hedge)—A Trump-imposed firm August 1st deadline looms for South Korea to reach a finalized trade agreement with the US, or else a 25% tariff could be imposed on America’s closest regional ally, which hosts major US military bases, and is heavily reliant on US ‘protection’ from North Korea and its nuclear arsenal.
The country’s Deputy Prime Minister Koo Yun-cheol and Foreign Minister Cho Hyun are set to meet with US Treasury Secretary Scott Bessent and Secretary of State Marco Rubio next week, and Seoul appears ready to pull out all the stops. “The government has pledged to devote its full efforts to concluding trade negotiations with Washington before the August 1 deadline,” a recent Korean government statement from the office of the presidency pledged.
The Koreans appear ready to get creative in satisfying Trump, as the weekend statement confirmed Washington’s “strong interest in the shipbuilding sector” and agreed to work towards mutual cooperation on that front. Fresh Monday reports indicate South Korea is ready to go all-in, offering a major proposal to seal a last-minute agreement to avoid a dreaded 25% tariff rate.
Yonhap News has reported a multibillion-dollar proposed project dubbed “Make American Shipbuilding Great Again” – or MASGA – but without offering much more in the way of details.
“We confirmed the US side’s strong interest in the shipbuilding sector and the two countries agreed to work together to develop mutually acceptable terms that include shipbuilding cooperation,” South Korea’s presidential office said.
While Korean officials have been warning media to not jump the gun, and to report sensitive negotiations responsibly, the reality is that the US ally has something America actually needs – the ability for major investment as well as technical expertise and experience in overhauling the nation’s shipyards.
This has been one of the Trump administration’s top America First priorities, and though the US has long been a leading global naval power, it also desperately needs its navy modernized – a massive, costly, and time-consuming endeavor.
And South Korea is among few rare nations which actually has the capability to do it, as one regional publication underscores:
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Korea’s shipbuilding sector has been regarded as the country’s unique leverage in the tariff talks with the US as its world-class capabilities can contribute to the Trump administration’s goal of reviving American shipbuilding.
Two of Korea’s leading shipbuilding conglomerates — HD Hyundai and Hanwha Group — have already been ramping up their investments in the US and bolstering partnerships with American companies in the shipbuilding sector.
HD Hyundai joined hands with US shipyard operator Edison Chouest Offshore to build medium-sized container vessels at the American company’s shipyard by 2028.
To review of Trump’s early prioritization of this sector, an April 9 executive order highlights that America’s shipbuilding capacity has been hampered and weakened by “decades of Government neglect.”
This has not only led to the decline of a once strong US industrial base, but has resulted in “simultaneously empowering our adversaries and eroding United States national security.”
“Both our allies and our strategic competitors produce ships for a fraction of the cost needed in the United States,” the executive order said, and called for “the United States to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity.”
The White House is likely to be keenly interested in pursuing MASGA, as it offers something tangible and speaks the language of Trump’s America First, and desire to bring a forgotten industry back home.
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