Huntington Ingalls, a U.S. military shipbuilder, and HD Hyundai Heavy Industries of South Korea have reached an understanding to look into ways to increase production of commercial and defense projects, the companies announced Monday.
The companies have signed a memorandum of understanding to discuss areas of innovation, and maximize the use of their complementary resources to optimize production.
The U.S. is looking to deter China's dominance in the shipbuilding industry. In its January investigation, the U.S. Trade Representative found China's dominance in shipbuilding "unreasonable" and "actionable" under U.S. trade laws.
Moreover, President Donald Trump is planning fees on imports coming in by Chinese-made ships and offering tax credits to bring back domestic shipbuilding.
According to the companies, the Huntington and HD Hyundai Heavy Industries agreement would augment the collective maritime industrial base of both the U.S. and South Korea, and also comes at a time when countries across the world are ramping up defense spending in the wake of increased geopolitical tension. According to its website, HD Hyundai Heavy Industries has approximately a 10% global market share in shipbuilding.