US Navy to Allow Foreign Companies to Build Ships Overseas
President Trump signs MOU allowing foreign companies to construct up to two vessels in their parent countries' shipyards to increase US Navy's shipbuilding and repair capacity.
The US Navy is set to allow foreign companies to build ships overseas as part of a new agreement signed by President Donald Trump.
The memorandum of understanding (MOU) allows foreign companies to construct up to two vessels in their parent countries' shipyards to increase the US Navy's shipbuilding and repair capacity. This move is aimed at increasing the US Navy's shipbuilding and repair capacity, but has been met with criticism from some shipbuilding trade groups.
The MOU also orders the Defense Department to seek more foreign direct investments in the US shipbuilding industrial base, derived from the "Finland Model". This model builds on a previous MOU signed by Trump in October 2025, which allowed Finland to supply four polar icebreaker Arctic Security Cutter vessels for the US Coast Guard.
The agreement also includes plans to replace the aircraft carrier-based Electromagnetic Aircraft Launch Systems (EMALS) and the Advanced Weapons Elevators (AWEs) with "traditional steam and hydraulic systems" during the construction of the aircraft carrier CVN 81, or the USS Doris Miller.
The US Navy has been using EMALS on its aircraft carriers for over a decade, with the first installation on the USS Gerald R. Ford. However, President Trump has expressed a preference for traditional steam and hydraulic systems, which were used during World War II.
The MOU also orders the Defense Department to establish a fifth Naval shipyard to increase domestic submarine and aircraft carrier repair capacity, as well as a component repair center to hold, repair and refurbish components for major submarine programs.
| Feature | Finland Model | US Navy | | --- | --- | --- | | Vessels | 4 polar icebreaker Arctic Security Cutter vessels | Up to 2 vessels | | Shipyard Location | Finland's shipyards | Foreign companies' shipyards |
The Trump administration has taken steps to fix the shipbuilding industry over the past couple of years, including signing an executive order in April 2025 to rebuild the domestic maritime industry and workforce. The "America's Maritime Action Plan" was also released in February, which includes increasing domestic shipbuilding capacity, stimulating investments in US shipyards and increasing supplier cooperation with allies and partners.
However, some shipbuilding trade groups are not content with Trump's strategy to build vessels overseas. Matthew Paxton, president of the Shipbuilders Council of America, wrote in a July 21 op-ed that while the passion to accelerate Navy shipbuilding is the "right instinct", the speed "without sound judgment is not a strategy". He also added that allied shipyards are not a "seamless substitute for American ones" and that military shipbuilding involves classified systems, advanced combat integration, and proprietary technologies that operate at the edge of what is legally and strategically permissible to share with foreign entities.
The House bill of the National Defense Authorization Act for Fiscal Year 2027 has a section dedicated to the SHIPS for America Act, which would stabilize the maritime supply chain, increase domestic shipbuilding and improve the workforce. The Senate will vote on the bill when lawmakers return from their August recess.
The implications of this agreement are still unclear, but it is clear that the US Navy is looking to increase its shipbuilding and repair capacity, and is willing to consider building vessels overseas to achieve this goal.
