The directive comes as Washington seeks to strengthen its naval position against China in the Indo-Pacific, where US officials have warned that America’s shipbuilding capacity has fallen behind strategic demand.

Under the memorandum, foreign companies must either build a new US shipyard or acquire a controlling stake in an existing one – a requirement that South Korea’s Hanwha already meets after taking over Philadelphia’s Philly Shipyard, one of the few large commercial yards on the US East Coast, in 2024.

Foreign shipbuilders must also train American workers and transfer proprietary techniques to their US operations. Additional vessels will have to be built in the US.

“We’re now studying this announcement,” a Hanwha Ocean spokesman said, declining to give further details.