If you’ve been following defense news this month, you’ve probably seen the headlines: President Trump signed a National Security Presidential Memorandum on August 13 aimed at overhaul-level changes to U.S. naval power. The directive covers everything from replacing catapult systems on the carrier USS Doris Miller (CVN-81) to planning a fifth public naval shipyard—the first in over 80 years.
But one specific provision immediately ignited a fierce debate across Washington, the defense industry, and naval policy circles: the proposal to temporarily build certain U.S. Navy ships in foreign yards.
To understand why this is happening—and why experienced naval experts hold drastically different views on it—it helps to look past the political noise and unpack the underlying problem.
The Reality: America’s Shipyards Are Bottlenecked
The United States faces an industrial capacity crisis. Domestic Tier-1 shipyards are heavily backlogged. Maintenance delays mean warships spend too much time tied up at piers waiting for repairs, while new construction schedules continue to stretch. Recent fleet incidents—such as the engineering power failure on the destroyer USS Benfold and extended deployment strain on the carrier USS Abraham Lincoln—show how depot maintenance backlogs directly impact daily fleet operations.
Everyone agrees on the core objective: America needs more ships, delivered faster, backed by a resilient domestic industrial base. The debate is strictly over how to get there.
What the “Finland Model” Actually Does
The controversy centers on expanding what policy experts call the “Finland Model”.
First used for U.S. Coast Guard icebreakers, this framework allows a qualified foreign shipbuilder to construct the first two ships of a specific class at its home shipyard. However, this foreign construction comes with mandatory conditions:
- Domestic Investment: The foreign company must simultaneously build a new shipyard in the United States or acquire majority ownership of an existing American yard.
- Local Workforce: It must hire and train an American workforce.
- Tech Transfer: It must license its proprietary shipbuilding technology to the U.S. facility.
- Domestic Transition: Every follow-on ship in that class after the first two must be built inside the U.S.
Proponents frame this as a trade: leveraging near-term allied industrial capacity to rapidly add hulls right now, while using access to U.S. defense contracts as leverage to force foreign capital into domestic yards.
The Core Debate: Leverage vs. Risk
This strategy has divided experienced naval analysts into two distinct camps:
- The Case For (Speed & Competition): Proponents, including Office of Management and Budget Director Russ Vought, argue that domestic shipyards lack the capacity to rapidly scale on their own. By offering market access to proven international shipbuilders—like South Korea’s Hanwha Group, which bought Philly Shipyard and bid $1.2B for Austal USA—the U.S. can inject foreign capital, modernized techniques, and competitive pressure directly into American shipbuilding.
- The Case Against (Enforcement & Sovereignty): Opponents, including naval analyst Hunter Stires and the Shipbuilders Council of America, point out a major structural risk: leverage. Access to the U.S. market is Washington’s strongest bargaining chip. Once the first two hulls drop anchor, that direct leverage drops. If a foreign partner fails to follow through on building out American yard capacity, the U.S. risks losing domestic shipbuilding jobs without securing long-term industrial independence.
“…diverted from American shipyards this Administration pledged to rebuild.” — Matt Paxton, President of the Shipbuilders Council of America
The Path Ahead: Accountability First
This isn’t a simple fight between “buying American” and “outsourcing.” It is a fundamental question of policy design and enforcement.
How do we take advantage of international partnerships without exposing the U.S. industrial base to long-term risk?
That is where legislative solutions come in. Legislative frameworks like the Defense Reinvestment Credit (DRC) under the proposed Strategic SEAS Act aim to close this exact gap. Rather than taking a foreign firm’s future promises at face value, mechanisms like the DRC mandate audited, verified capital milestones on American soil before contracts are finalized or paid out.
As Congress navigates the upcoming National Defense Authorization Act (NDAA) conference and the Department of War prepares its implementation plans, the key metric won’t be political promises. It will be who pays, who is held accountable, and whether capital actually lands in American shipyards.