The Pentagon has instructed the US Navy to build Mogami class and Daegu class vessels

The U.S. Department of War is considering plans to procure foreign destroyer and frigate designs, and build warships in overseas shipyards, in response to the serious hindering of the U.S. Navy surface fleet’s capabilities resulting from the limited capacities of the U.S. shipbuilding industry.

The Fiscal Year 2027 budget proposal includes $1.85 billion in research and development funding for studies on building frigates and destroyers overseas.

The Pentagon has instructed the Navy to consider using Japanese and South Korean shipyards and their designs, such as the respective Mogami class and Daegu class vessels.

Federal law stipulates that U.S. Navy warships can only be built in U.S. domestic shipyards unless the president grants a waiver on national security grounds, with plans to build warships or even spare parts oversea likely to draw criticism from lawmakers, domestic shipbuilding firms, and labor unions.

Opposing the possible outsourcing of warship production, President of the American Shipbuilders Association Matthew Paxton claimed:

We don’t need to spend millions of dollars of taxpayer money to study what we already know; the United States has enough industrial strength, skilled labor, and technical expertise to build and maintain America’s maritime power.

The U.S. shipbuilding industry has proven its ability to deliver the world’s most advanced naval vessels on time and within budget.

With continued investment and clear guidance from policymakers and the government, the U.S. domestic shipbuilding industry is ready to meet growing demand and support the Navy’s long-term missions without compromising national security.

East Asian firms’ ownership of U.S. shipyards, and importing of labour and expertise, may be seen as a compromise between procuring ships from abroad, and continuing to rely on the underwhelming capabilities of the domestic U.S. industrial base.

There has been a growing trend towards foreign firms acquiring U.S. shipyards, with South Korea’s Hanwha Group having acquired Philly Shipyard in Philadelphia, Pennsylvania, while actively vying for more shipbuilding business with the U.S. Navy.

United States destroyer production has been surpassed by a growing margin by that of China, which has produced 6-10 destroyers per year, where the U.S. has averaged 1.6.

The USA has more recently been surpassed by North Korea, which is set to continue producing destroyers at rates of 1.6 per year.

This issue is considerably more serious when considering that the U.S. Navy is still exclusively procuring the late Cold War era Arleigh Burke class destroyer, the age of which has limited their ability to continue receiving upgrades and enhancements, with the ship’s basic design deficient in space, weight, and power by the standards of the 2020’s.

Efforts to develop clean sheet new surface combat ships have since the end of the Cold War consistently failed, with the Zumwalt class destroyer program, which produced a very limited number of highly problematic ships costing over $8 billion each, being a notable example.

The U.S. Navy in January 2022 released details of a possible configuration for a next generation destroyer, which is currently being developed under the DDG(X) program.

Cuts to the Zumwalt class stealth destroyer program from 32 to three ships, due to significant performance issues and cost overruns, has limited the U.S. Navy’s ability to keep up with Chinese advances.

The leading edge capabilities of Chinese destroyers such as the new Type 055 class having been a primary factor stimulating interest in accelerating the development of the DDG(X).

The ability of the U.S. defense sector to develop a next generation ship in an acceptable time-frame and at a viable cost remains in serious question, which has fueled growing support for building the DDG(X) in South Korea, or possibly in Japan.

This would further concentrate the production of advanced ocean-going surface warships in Northeast Asia, with the U.S. currently being the only producer vessels with remotely comparable capabilities to those founding Japan, China and the Korea’s.

Military Watch Magazine / ABC Flash Point News 2026.