Hanwha, Fincantieri shares rise after Trump opens Navy shipbuilding to foreign yards

Shares of South Korean conglomerate Hanwha Group and Italian shipbuilder Fincantieri surged on Friday following President Trump's announcement that the U.S. Navy will allow foreign shipyards to build up to two vessels in their facilities. Hanwha, which currently has the largest U.S. shipyard footprint, saw its stock jump 5.6 percent while Fincantieri increased by 3.2 percent.

Trump signed a national security memorandum on Thursday that permits foreign builders that invest significantly in U.S. shipyards and train American workers to construct up to two vessels abroad quickly. The memo applies to three types of ships: surface combatants, consolidated cargo replenishment tankers, and roll-on/roll-off vessels.

Bryan Clark, a senior fellow at the Hudson Institute, believes that South Korea's substantial financial commitments to U.S. shipbuilding give Hanwha an edge. Hanwha recently pledged $5 billion to expand its Philadelphia shipyard as part of a trade deal with Washington.

Fincantieri, Europe's largest shipbuilder, has invested over $800 million in its U.S. yards over the past decade and recently won a $30 million Navy contract for early work on Medium Landing Ship vessels. The company did not immediately respond to requests for comment.

The new policy is likely to initially prioritize building tankers and roll-on/roll-off vessels due to the costs and complexity involved in modifying ships for the U.S. supply chain. The Shipbuilders Council of America has cautioned that directing shipbuilding overseas undermines U.S. industry.