The United States lacks warships. A shipbuilding sector still suited to peacetime, a fast-multiplying Chinese navy, and allied yards offering impressive capabilities are aligning to provide new options for Washington.
The Trump administration has made revitalizing American shipbuilding a major policy priority, but this will take time. As the 2026 Maritime Action Plan stated: “The United States does not have the capacity necessary to scale up the domestic shipbuilding industry to the rate required to meet national priorities.”
What to do? In an August 13 presidential memorandum on Rebuilding the United States Navy and America’s Shipbuilding Industrial Base, the White House advocated what it called the “Finland Model” of allied shipbuilding to allow the first two ships in multi-ship buys to be constructed in select foreign shipyards in exchange for, or in response to, robust investment in America’s maritime industrial base.
This model is loosely based on the trilateral American-Canadian-Finnish ICE Pact agreement, in which Finnish shipyards will construct four Arctic Security Cutters for the US Coast Guard, with seven additional ships being built in the US and Canada with Finnish guidance and technical support.
The Trump administration’s embrace of this model reflects the urgent need to address America’s shipbuilding woes.
While the US has only seven shipyards that build complex naval warships, China’s state-backed shipbuilding industry boasts 200 times America’s capacity and is on track to grow its naval battle force to a whopping 435 ships by 2030. The US force is currently 294 ships, with a plan to reach 381 by 2042. Although many US allies, particularly in Europe, have also experienced shipbuilding declines, Trump has identified multilateral shipbuilding cooperation as a rapid means to bolster the USN and narrow the fleet-size gap with China.
Notably, this proposal does not give the Navy carte blanche to outsource all shipbuilding projects to foreign yards. Instead, the memo sets clear limits on the practice, restricting foreign construction to shipbuilders that own or hold a majority stake in an American shipyard that employs American workers, utilizes American supply chains, and licenses the parent yard’s proprietary technologies to support American shipbuilding projects (interestingly, there are no Finnish shipbuilders who meet these criteria, making the Finland Model something of a misnomer).
Additionally, the memo identifies only three ship types to which the Finland Model can presently be applied: Consolidated Cargo Replenishment at Sea Tankers (CONSOLs), Roll-On, Roll-Off Vessels and a future surface combatant. It is the last of these three that has raised the most eyebrows; while there are historical examples of the US government purchasing auxiliary ships from friendly nations, there is no precedent for America purchasing foreign-built warships post-World War II — a prospect which the memorandum seemingly makes possible.
How would foreign construction of US naval vessels work in practice? Companies with existing American shipyards are well-positioned to compete for contracts in the near-term. In addition to South Korea’s Hanhwa Ocean and Australia’s Austal Limited, which own American shipyards, Italian shipbuilder Fincantieri’s yard in Marinette, Wisconsin would qualify to build US naval ships in Italy. (East Asian yards are especially eye-catching – South Korea has built Aegis destroyers much faster and cheaper than the US equivalent.)
Similarly, while Britain’s BAE Systems does not build ships in the US, its American ship repair yards could potentially open the door for British-built American naval ships, depending on how the memorandum is interpreted. Other European shipbuilders may also consider purchasing or building American yards once they evaluate the seriousness and durability of America’s willingness to outsource.
Regardless of which companies end up building American naval ships abroad, it is unlikely that they will be tasked with building the entirety of the vessel and its components. The US State Department’s International Traffic in Arms Regulations (ITAR) limit the export of confidential technical data and ship designs, which could make it difficult for the Navy to share blueprints or technical specifications with foreign shipyards.
This would either require sign-off by the State Department for the Navy to share technical data on ship operating systems with foreign shipbuilders, or it would restrict foreign yards to building the hulls or other less-sensitive parts of the ships, leaving American yards to add the more technical systems. While foreign shipyards may be permitted to build larger portions of non-combatant ships like CONSOLs, the construction of combatant vessels would likely require ships to be built in such a way that allows combat systems to be easily integrated once they are towed to American yards.
Foreign construction of American naval vessels will also face several logistical and political hurdles. The US Navy has higher redundancy and ship survivability standards than most of its European partners, which could challenge foreign shipyards to construct ships around different and more stringent requirements than is customary.
While the memorandum cautions against changing the “original mature parent designs” of foreign-built ships, stringent requirements for US warship survivability were cited as one of the key causes of the delays which ultimately doomed Fincantieri’s efforts to translate its FREMM frigate design to the now-canceled Constellation-class frigate, which was intended to be built for the US Navy in Marinette.
Congress could also prevent such allied shipbuilding cooperation from proceeding through provisions such as the amendment added to the House version of the FY27 National Defense Authorization Act, prohibiting the building of “battle force” ships overseas. Politicians representing shipbuilding states and districts will be strongly incentivized to oppose the outsourcing of any shipbuilding projects which could be performed domestically — even with most American yards currently experiencing significant construction backlogs and constrained capacity.
Yet the potential benefits of such shipbuilding endeavors to both America and its European allies might make these challenges worth overcoming.
For the US, this proposition could not only accelerate the delivery of new ships to the fleet and encourage greater foreign investment in US shipbuilding but could also result in the best practices utilized in foreign yards being diffused to America’s industry. By insisting that only shipbuilders who allow their proprietary shipbuilding techniques to be utilized in their American yards are eligible to construct US naval vessels abroad, the US could positively disrupt American shipbuilding by encouraging foreign companies to import their disciplined design-and-build approaches and innovative uses of advanced and emergent technology such as AI and automation.
Additionally, an expansion of the Finland Model to other European nations could help deepen maritime and defense partnerships between Europe and the US. Not only would such engagements demonstrate the continued value of the transatlantic alliance, but they could also create space for greater cooperation to jointly grow and preserve their maritime industrial bases.
Ships could be specifically designed to meet the security needs of America and its European partners, greater familiarity with American naval vessels and systems could support improved interoperability among naval allies and more deeply connected maritime industrial bases could enable the creation of an allied supply chain network, in which common stockpiles of parts and materials used across multiple allies could be created, and alternative supply chains could be established to make essential defense projects less prone to supply chain disruptions.
All these developments would be mutually beneficial to America and its European maritime partners, and all of them could potentially emerge from greater allied shipbuilding cooperation.
While the Finland Model is no substitute for rebuilding America’s domestic shipbuilding capacity, greater cooperation with allied shipyards could help spur the growth of the US Navy and accelerate the transfer of technologies, expertise, and industrial best practices to the US.
If the White House can overcome the regulatory and political obstacles to foreign construction, greater allied shipbuilding cooperation could help deliver ships faster while creating a more resilient and integrated allied maritime industrial base. Similarly, should European shipbuilders seize the opportunity to deepen their connections to American shipbuilding, they could help strengthen transatlantic military relations and create a rising tide that raises ships on both sides of the Atlantic.
Matt Reisener is the Senior National Security Advisor for the Center for Maritime Strategy. He previously served as the National Democratic Institute’s Senior Program Manager for the Middle East and North Africa, managing international development programs in Yemen and Algeria. Before that, he worked at the Center for the National Interest from 2017-2021, where he was chief of staff. He holds a Master of Arts in International Relations from the University of Chicago’s Committee on International Relations, as well as a Bachelor of Arts in Political Science and Rhetoric & Political Communication from William Jewell College.
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