The Future of America’s Alliances Is Industrial
Even as the Supreme Court has struck down President Trump’s tariffs, America’s allies are continuing to respond to Washington’s growing calls for greater contributions to the alliance system. In South Korea, in particular, the National Assembly still plans to move forward with its “Invest in America” bill, which would see $350 billion of investment from South Korea, largely from Korean corporations but channeled through a government-backed financing framework, to rebuild America’s shipyards. Though the legislation may have been born of President Trump’s initial tariff threats, lawmakers in Seoul are continuing to push it forward despite the Supreme Court ruling that found the International Emergency Economic Powers Act does not grant the president broad authority to impose tariffs unilaterally. In Seoul, it’s clear that Korea’s legislature sees itself as not merely reacting to short-term political pressure, but as adapting to a structural shift in how America’s alliances operate in a new era of economic statecraft.
To an outside observer, this may appear to be a successful act of coercion on the part of the U.S., but in reality, it is anything but. South Korean lawmakers increasingly see economic integration with the United States not as a concession but as an adaptation to a new era of great-power competition. In the recent past, when the greatest threats to the alliances and global order that the United States helped create were from non-state actors and terrorist cells, America’s alliances could be maintained on shared ideology and minimal peacetime deployments. In this new era of great power competition, it’s not just troop deployments and financial contributions that matter; economic integration and industrial capacity are increasingly pillars of American power rather than side issues. If America and its allies are to preserve the current global order, they will need to focus on industrial scaling and supply chain integration to sustain long-term deterrence against a rising China.
The urgency for quick action should be apparent. At the height of World War II, the United States produced an average of 200 ships a month; today, it can barely produce between five and ten vessels a year. In 2025, China became the world’s largest shipbuilding industry, which accounts for more than half of the shipbuilding output on earth. This dominance in commercial shipbuilding provides the industrial base that supports its rapidly growing naval fleet. And this overwhelming industrial advantage is being leveraged to increase pressure across the Indo-Pacific. 2025 was a record year for Chinese naval activity, from the surprise live fire exercises as far as the Tasman Sea, to the constant dangerous harassment and the multiple ramming attempts toward Filipino vessels in internationally recognized Filipino waters. If the United States and its allies hope to maintain the existing balance in the Indo-Pacific, they cannot rely solely on diplomacy or military deployments. They must also rebuild the industrial capacity that sustains naval power. South Korea’s investment in American shipbuilding represents one of the first concrete steps in addressing that challenge.
South Korean investment and shared expertise in reigniting American shipyards is more than just an economic win for the Trump administration. It’s the foundation of sustainable deterrence that will ultimately help prevent war in the Indo-Pacific, and the People’s Republic has taken notice. China has been seeking to systematically disable and drive a wedge between the Republic of Korea-U.S. alliance everywhere it can. From the massive sanctions it slapped on Korean businesses in 2016 after the deployment of American THAAD systems in the Korean Peninsula, to the newer sanctions placed on Korean and American businesses in 2025 after Korean defense firms like Hanwha and HD Hyundai agreed to take on U.S.-based shipbuilding projects, Beijing does not want strengthened Republic of Korea-U.S. collaboration. The reason is obvious: Second only to China, South Korea dominates the global shipbuilding market, accounting for as much as 28 percent of global ship production.
Critics argue that using economic leverage ultimately threatens alliance cohesion and undoes any benefits that agreements like these bring. This concern is understandable. However, the debate in Seoul suggests a different interpretation. The strategic embedding of South Korean shipbuilding in American industry, focused on capacity building and co-production, ensures the longevity and viability of America’s alliances, something that is invaluable to America’s allies in an age of uncertainty.
As a result, future administrations, both Republican and Democratic, will inherit a multibillion-dollar industry that serves both America’s economic and security interests. The future of America’s alliances and security won’t depend merely on treaties and troop deployments, but on the joint industrial and economic partnerships that can sustain them.
