White House notes its proposal to build 2 combat, 2 non-combat vessels in foreign shipyards in memo

The White House recently emphasized a priority legislative proposal in a document sent to Congress, which would permit the U.S. Navy to construct two combat vessels and two non-combat auxiliary ships in foreign shipyards. This proposal was detailed in an Office of Management and Budget (OMB) policy statement, which was shared with the House of Representatives on July 21 to clarify the administration's stance on the House version of the National Defense Authorization Act (NDAA) for fiscal year 2027.

The OMB expressed its disagreement with a specific provision in the House bill that would prevent the use of defense funds to procure "battle force" vessels built in foreign shipyards. According to the OMB, this prohibition contradicts the administration's priority proposal, which aims to attract substantial foreign investment to domestic shipyards by allowing the Navy to contract for the construction of these vessels overseas.

Additionally, the OMB highlighted the urgent need to address existing shipbuilding backlogs within the U.S. The proposal to utilize foreign shipyards has gained momentum as South Korea and the United States have intensified their collaboration to rejuvenate America's shipbuilding sector, driven by concerns that U.S. regulatory barriers might impede joint efforts between the two allies.

South Korea has committed to investing $150 billion in shipbuilding partnerships with the U.S., as part of a broader $350 billion investment pledge under their recent trade and investment agreement. The OMB also referenced the "Finland Model," which involves initially acquiring vessels more rapidly from allied foreign shipyards before transferring production to the U.S., provided that foreign investment is secured.

The OMB argued that the bill's restrictions on purchasing ships from foreign shipyards limit the flexibility of the U.S. in leveraging specific advancements, strengths, and technologies offered by foreign shipyards that align with critical Department of War needs. The statement further emphasized that accessing these foreign shipyards would accelerate the expansion of the U.S. shipbuilding industrial base and directly aid in fulfilling urgent national security objectives.

Earlier this month, U.S. President Donald Trump hinted that his administration may explore partnerships with South Korean and other firms for shipbuilding cooperation as part of efforts to bolster the U.S. Navy.