South Korea announced on Tuesday a record $1.8 billion (2.6 trillion won) investment in its shipbuilding sector — a 40% increase from last year — to strengthen its lead in green and digital ship technologies. The funding will focus on eco-friendly ships (1.7 trillion won), digital transformation of shipyards (700 billion won) and autonomous vessels (200 billion won). New R&D projects include ammonia-powered ships, electric propulsion systems, wind-assisted technology and AI-driven welding robots.

The government is also funding South Korea’s first ammonia bunkering vessel, which would support global decarbonization efforts and reinforce the country’s dominance in high-value shipbuilding. The industries ministry emphasized that investing in smart, green technologies is critical for long-term competitiveness as global demand shifts toward cleaner shipping.

WHY IT MATTERS

South Korea’s push for next-generation, high-value ships is a survival strategy in an increasingly protectionist global economy. Shipbuilding is one sector where South Korea will likely accelerate cooperation with the U.S., even as Trump’s trade war deepens. Trump reportedly sought South Korean cooperation in shipbuilding during his phone call with President Yoon Suk-yeol in November, but new U.S. tariffs on steel and aluminum imports will raise costs, making South Korean ships less competitive globally.

At the same time, China remains South Korea’s biggest rival in the shipbuilding sector. Beijing has aggressively expanded state-backed shipbuilding in LNG carriers and autonomous vessels. South Korea’s record investment in its shipbuilding sector is clearly an attempt to ensure that ROK companies remain ahead of their Chinese rivals, but the U.S.’ escalating trade war will test whether South Korea can hold its ground.