There is a consensus among local politicians that the 'Jones Act,' enacted 105 years ago in 1920 to protect the U.S. maritime and shipbuilding industries, should be amended. The Jones Act is a law that regulates maritime transport, requiring that vessels operating between U.S. ports be constructed in the United States and owned and operated by U.S. citizens. If the Jones Act is amended, it would allow the repair of U.S. military vessels in South Korea, benefiting South Korean shipbuilders.
According to industry sources on the 17th, former U.S. House Speaker Kevin McCarthy, who visited South Korea on the 14th, mentioned the South Korean shipbuilding industry and indicated that he would support the amendment of the Jones Act. The rationale is that, as the U.S. government desires to collaborate with South Korea in the shipbuilding, maintenance, repair, and overhaul (MRO) sectors, it will lift regulations that hinder such cooperation.
The Jones Act was enacted to protect the U.S. shipbuilding industry and has also contributed to its revitalization. U.S. shipyards were able to monopolize shipbuilding without competition.
However, the overly protected shipbuilders have focused on reducing expenses instead of developing production capacity, ultimately leading to decline. Last year, the U.S. accounted for a mere 0.1% of the global shipbuilding market. Orders for vessels totaled only five last year. Currently, the U.S. naval shipbuilding defense manufacturers are Huntington Ingalls and General Dynamics, which has led to a weakening of U.S. naval power.
As the U.S. hesitated, China's naval power surged, prompting various politicians to call for either the amendment or repeal of the Jones Act. In November of last year, Henry Haigert, a former U.S. Embassy official in South Korea, argued through a contribution to the Center for Strategic and International Studies (CSIS) that "the Jones Act should be amended to promote South Korean investments in the shipbuilding industry in the U.S." Mike Waltz, the White House national security advisor, has also mentioned revising the Jones Act.
The 'Shipbuilding and Port Facilities Act for American Prosperity and Security,' introduced on December 19th of last year, is expected to be an alternative to the Jones Act. The act outlines incentives for foreign corporations to invest in U.S. commercial and naval shipyards.
If the Jones Act is amended, it may be possible to repair U.S. military vessels or construct ships in our country. Hanwha Ocean and HD Hyundai are currently pursuing entry into the U.S. Navy's MRO market.