President Trump Directs Pentagon to Explore Foreign Shipbuilders, Revert Aircraft Carrier Systems
President Donald Trump has issued a presidential memorandum, dated August 13, instructing the Pentagon to open American warship construction to foreign shipbuilders under a novel model. This approach would permit the initial two vessels of a given class to be constructed abroad, provided the foreign builder subsequently establishes or acquires a shipyard in the United States and builds all subsequent ships on American soil.
The memorandum also contains a significant directive for the Secretary of War: to develop a plan to remove the Electromagnetic Aircraft Launch System (EMALS) and Advanced Weapons Elevators (AWE) from the aircraft carrier CVN-81. These advanced systems are to be replaced with steam catapults and hydraulic elevators, effectively reverting to the propulsion and ordnance handling arrangements utilized in previous generations of aircraft carriers.
Addressed to the Secretary of War, the Director of the Office of Management and Budget (OMB), and the National Security Adviser, the document asserts that the U.S. Navy “has experienced a series of shipbuilding setbacks stemming from overly complex designs and iterative design change procedures, which have resulted in cost growth, delays, and cancellations.” It further identifies a deficiency in capacity and competition among domestic shipbuilders, which it states has led to substantial backlogs across six major naval programs and a commercial shipbuilding sector deemed not globally competitive.
The “Finland Model” for Shipbuilding
The mechanism proposed for integrating foreign builders into U.S. naval construction is described in the memorandum as the “Finland Model.” This model is presented as taking its template from a memorandum of understanding (MoU) signed with Finland in October 2025, which concerned medium icebreaker construction. The “Finland Model” can be applied to a maximum of three distinct ship classes.
Under the stringent conditions outlined in the memorandum, any foreign supplier participating must concurrently undertake one of two actions: either construct a new American shipyard or obtain ownership or a majority equity position in an existing U.S. shipbuilding facility. Following the construction of the first two ships abroad, all subsequent vessels of that class must be built within the United States. Additionally, the foreign entity is required to hire and train an American workforce, license its proprietary shipbuilding techniques and technologies from the parent yard to the American facilities, and establish an American supply chain for both construction and ongoing maintenance.
Current United States law generally prohibits the construction of warships in foreign yards. To circumvent this, the memorandum delegates authority to the Secretary of War to make a national security determination that a particular contract qualifies for a waiver from this prohibition. Following such a determination, the Secretary must notify Congress, and no contract is permitted to proceed until 30 days after Congress has received this notification.
A New Competition for Frigates
Another key directive mandates the Secretary of War to submit a plan within 90 days for what the memorandum terms “a new competitive acquisition approach for surface combatants with sufficient inherent capabilities to perform anti-submarine warfare, surface warfare, and convoy escort duties.” Crucially, this plan must explicitly allow for proposals based on the international procurement model.
This description aligns with the capabilities of existing frigate designs such as the British Type 26 and Type 31, both of which have established export markets. BAE Systems has successfully sold the Type 26 design to Australia, Canada, and Norway, with the latter deal reportedly valued at £10 billion and signed in 2025. Similarly, Babcock’s Arrowhead 140, which serves as the parent design for the Type 31, has been selected by both Poland and Indonesia. The memorandum expresses a preference for such “mature designs in production,” indicating a desire for proven, readily available platforms.
The principle of design stability is a pervasive theme throughout the document. It explicitly states that the Navy “shall not impose iterative design changes upon the original mature parent designs” within the affected programs. Furthermore, no alterations may be made without the express approval of the Secretary of War, acting in consultation with the Navy Secretary, the Director of OMB, and the National Security Adviser.
While the target of this instruction is not explicitly named, the Constellation-class frigate program offers a relevant precedent. This class, derived from the Italian FREMM design, was initially conceived as a low-risk procurement of a proven vessel. However, it accumulated numerous American modifications, which significantly reduced commonality with the parent design and led to years of delays and substantial criticism from the Government Accountability Office.
Expanding Yards and Repair Capacity
The memorandum also addresses critical aspects of naval infrastructure and readiness. Within 120 days, the department is directed to submit a plan aimed at increasing nuclear submarine and aircraft carrier readiness. This comprehensive plan is to include the establishment of a fifth public Navy yard. The United States currently operates four such yards: at Portsmouth in Maine, Norfolk, Puget Sound, and Pearl Harbor.
The plan must specifically address the projected drydock capacity required for the anticipated growth of the attack submarine fleet over the next two decades. It mandates a focus on locations proximate to the Pacific Fleet, encompassing sites within the continental United States, Alaska, Hawaii, and American territories. Site options are to cover the potential for up to three new drydocks, sized to accommodate every current and projected class of submarine. Public-private partnerships are identified as a potential financing mechanism for these substantial infrastructure investments.
A separate plan, due within 90 days, focuses on establishing a Component Repair Center. This center would be dedicated to receiving new parts and refurbishing older ones for the submarine repair industrial base, with a mandate to hold at least one ship set of spare equipment for the Los Angeles, Virginia, Seawolf, Ohio, and Columbia classes of submarines.
Finally, Naval Sea Systems Command (NAVSEA) is also slated for a review within 120 days. The review is intended to produce recommendations for personnel, organizational, and structural reform. The stated objectives include implementing results-based accountability for NAVSEA leadership, measured by the speed of delivery, reducing bureaucracy, eliminating competing priorities within the command, and preventing NAVSEA from imposing redesigns on mature parent designs.
The memorandum builds upon an executive order signed in April 2025, titled “Restoring America’s Maritime Dominance.” The document notes that its implementation is contingent upon the availability of appropriations and clarifies that it does not create any enforceable right or benefit.
Why This Matters
This presidential memorandum signals a potentially transformative shift in the United States’ naval shipbuilding strategy and industrial policy, with profound implications for national security, economic investment, and international relations.
Strategic Shift in Defense Procurement:By exploring foreign shipbuilders, the U.S. is challenging decades of conventional wisdom that prioritized domestic-only construction for core defense assets. This move suggests a pragmatic approach to address perceived deficiencies in the existing industrial base, potentially prioritizing speed and cost-efficiency in fleet expansion over strict adherence to domestic manufacturing. It opens the door for European and other allied shipbuilders to play a direct role in equipping the U.S. Navy, a significant departure from tradition.
Economic and Industrial Impact:The “Finland Model” could lead to substantial foreign direct investment in American shipyards, creating new jobs and revitalizing existing facilities. However, it also introduces a new dynamic of competition for established U.S. defense contractors, potentially reshaping the landscape of the domestic shipbuilding industry. The requirement for a U.S. supply chain and workforce training aims to mitigate concerns about job outsourcing while still leveraging foreign expertise.
Naval Readiness and Capability:The directive to revert carrier systems (EMALS/AWE to steam/hydraulic) on CVN-81 reflects an ongoing debate within the Navy regarding the balance between advanced, potentially unproven technology and reliable, mature systems. This decision could impact future carrier designs and operational capabilities. Simultaneously, the aggressive push for a new frigate competition with an emphasis on mature, international designs, coupled with plans for a fifth public Navy yard and a dedicated submarine repair center, underscores an urgent focus on increasing fleet size, readiness, and maintenance capacity, particularly for the expanding submarine fleet in the Pacific.
Congressional Oversight and National Security:The memorandum delegates significant authority to the Secretary of War for national security waivers, requiring Congressional notification. This places Congress in a crucial oversight role, as lawmakers will need to scrutinize each proposed foreign contract for its implications on national security, technological transfer, and the health of the domestic defense industrial base. The balance between perceived short-term gains in shipbuilding capacity and long-term concerns about industrial sovereignty will be a central point of debate.
Geopolitical Implications:Engaging foreign shipbuilders could strengthen defense ties with allied nations whose companies might participate. Conversely, it could also raise questions about supply chain security and the reliance on foreign entities for critical naval assets in times of conflict. The move reflects a broader strategic realignment aimed at maintaining U.S. naval dominance in an evolving global security landscape.