Modern LNG Carrier

U.S. President Donald Trump signed five sector-specific presidential determinations under Section 303 of the Defense Production Act (DPA) on the 20th (local time).

U.S. political columnist Gene Cummings announced via Facebook that these five documents officially took effect upon their publication in the Federal Register (FR) on April 23.

According to Gene Cummings, these sectors include △Large-scale energy and energy-related infrastructure △Power grid infrastructure, equipment, and supply chains △Coal supply chains and baseload power generation △U.S. domestic oil production, refining, and logistics; and △Natural gas transmission, processing, storage, and LNG capacity. This is directly linked to Executive Order 14156, the declaration of a national energy emergency, issued on January 20, 2025, the day of President Trump's inauguration.

He further explains that if the January 2025 Executive Order was a "recognition of threat" declaration stating that the U.S. energy supply capacity could not meet national demand, thereby affecting manufacturing, transportation, agriculture, and defense industries, then the Section 303 DPA determination on April 20, 2026, is an action that actually pushed through that door.

This represents a formal decision by the Trump administration to bring the entire energy supply chain under the national defense system, mobilizing federal funds, purchase commitments, financial instruments, and capacity development.

He also criticized that most Korean media outlets have covered this issue merely as "Trump invokes law from Korean War to respond to oil prices," "Federal funding for the energy sector," or "Potential benefits for the Korean shipbuilding industry," reporting it at the level of the Trump administration providing funds to respond to oil prices.

The core of this legislation, as highlighted by Gene Cummings, is as follows. This is from his Facebook post on the 28th (Korean time).

The Essence of This Measure

The invocation of the DPA this time is not a simple response to oil prices or an energy policy. It is a declaration that elevates energy issues to national security and defense matters, which the U.S. government will directly control and manage.

Section 303 of the DPA allows the President to purchase, commit, provide financial support, and develop capacity to create, maintain, protect, and expand domestic industrial bases essential for national defense. Notably, these recent determinations explicitly include "domestic manufacturing capacity" as a critical element of national defense through the use of authority under 303(a)(7).

The large-scale energy infrastructure determination designates the capacity for development, manufacturing, and deployment, while the power grid determination designates transformers, transmission components, and power electronics as essential industrial resources for national defense.

President Trump determined that "shortages of industrial resources and critical technologies that could seriously impair national defense capabilities could occur if domestic capacity is not expanded," and instructed the Secretary of Energy to take necessary actions.

This goes beyond a simple expansion of crude oil production.

It is an industrial mobilization measure to rebuild the entire supply chain and manufacturing base within the United States, including energy production, transportation, refining, storage, generation, grid connection, and LNG liquefaction.

When combined with the existing federal procurement conditions of the Buy American Act and the Executive Order for the reconstruction of the maritime and shipbuilding industries in April 2025, it is highly likely that domestic production, supply chains, and employment will effectively become priority conditions for projects receiving Defense Production Act (DPA) funds.

The Issue Not Adequately Covered by Korean Media

Most Korean media outlets have covered this issue as "Trump invokes law from Korean War to respond to oil prices," "Federal funding for the energy sector," and "Potential benefits for the Korean shipbuilding industry," reporting it at the level of "the Trump administration providing funds to respond to oil prices." However, this reporting frame misses the core issue.

The essence of this Executive Order is not a simple response to oil prices.

This measure signifies that the United States is elevating its energy sovereignty to a national security issue, combining that energy sovereignty with domestic manufacturing capabilities, and transitioning to a long-term protectionist system.

This is not an issue that can be explained merely by the word "opportunity" for the Korean economy. Rather, it is a matter that requires a sober assessment of the conditions Korean manufacturing and export industries will face in the U.S. market.

The Powerful Implementation of the "Domestic Manufacturing Capacity" First Principle

The most crucial aspect of this measure is that through Section 303 of the DPA, the President has opened the door to inject federal government purchases, commitments, financial support, and capacity development into industrial resources and critical technology items "essential for national defense."

The determinations consistently emphasize "domestic capability," "domestic manufacturing capacity," "domestic petroleum production," and "domestic natural gas transmission and transportation."

The shipbuilding, LNG carrier, steel, transformer, power equipment, plant, gas turbine, nuclear component, and power grid equipment sectors, in which Korean companies have strengths, fall directly within the scope of impact.

While previously viewed as opportunities for the expansion of U.S. energy, power, and shipbuilding infrastructure, under the Section 303 DPA regime, those opportunities have transformed into conditional opportunities, representing a significant difference in meaning.

Companies that cannot meet these criteria will inevitably be placed at a disadvantage, facing conditions such as whether they produce domestically, employ Americans, are part of the U.S. supply chain, and conform to the technology, capital, and production structures demanded by the U.S. government.

This is not a simple "subsidy competition." Rather, it is a structure in which the U.S., by reclassifying its energy and manufacturing base as a national defense industry, pressures foreign companies to "produce within the U.S. while employing Americans to enter the U.S. market," and this has now been substantively implemented with the announcement.

Limitations of the "Short-Term Benefit Frame" for LNG Carriers, etc.

The benefit most emphasized by Korean media is LNG carrier orders.

The logic is that Korean shipbuilders' "Big Three" could receive additional orders with the expansion of U.S. LNG exports. In the short term, this is not entirely incorrect. The Korean shipbuilding industry remains at the world-class level in the LNG carrier sector.

However, the problem lies in the next stage.

The Trump administration has already designated the reconstruction of U.S. maritime and shipbuilding industries as a national security task. The April 9, 2025, Executive Order explicitly stated that the weakening of U.S. commercial shipbuilding capacity and its maritime workforce base undermines national security.

Hanwha's announcement of a $5 billion investment in Philly Shipyard also aligns with this trend.

What the U.S. desires is not a structure where Korean shipyards build ships in Korea and deliver them to the U.S. It is about bringing Korean technology and production methods onto U.S. soil to create an American industrial base.

Orders may come in. However, whether those orders are for vessels built in Korea or built in the U.S. is an entirely different matter.

The "shipbuilding benefits" discussed by Korean media only calculate corporate orders, stock prices, and sales outlooks. However, they do not adequately ask whether those benefits will actually translate into domestic production in Korea and jobs for Korean workers.

Direct Pressure in the Power, Grid, and Plant Sectors

The most critical sectors are the power grid and grid infrastructure.

DPA determinations designate transformers, transmission lines, conductors, substations, high-voltage circuit breakers, power control electronic equipment, protective relay systems, and electrical steel sheets as essential national defense items, noting that foreign competition and excessive reliance on imported equipment make the U.S. vulnerable in situations of war, disaster, or economic shock.

These are precisely the areas where Korean companies like LS Electric, HD Hyundai Electric, Hyosung Heavy Industries, POSCO, Hyundai Steel, and Doosan Enerbility have strengths.

Although they are already securing large contracts due to the demand from U.S. AI data centers, semiconductors, and electric vehicles, under the DPA regime, these opportunities can simultaneously turn into pressures.

Domestic production and inclusion in the supply chain will become mandatory conditions for projects involving federal funds.

Chain Reaction Impact on Steel, Construction, and Component Supply Chains

The steel and plant sectors are no exception.

There is ample room for increased demands for U.S.-made steel and equipment in projects such as POSCO International's participation in the Alaska project, and Hyundai Engineering & Construction and DL E&C's LNG terminal, power plant, and pipeline projects.

When large-scale energy infrastructure projects are combined with DPA funds, federal procurement, and domestic supply chain conditions, the participation requirements for Korean companies become much more stringent.

Ultimately, the moment the U.S. links energy infrastructure to national defense industries, all steel, wires, transformers, turbines, vessels, and port equipment entering that infrastructure become part of the national security supply chain. Foreign companies are no longer simple suppliers but are subject to review, conditional participants, and in some cases, excluded.

Why Has It Come to This?

As Trump began his second term, he first declared a national energy emergency. At that time, the U.S. still left certain exceptions and room for cooperation with its allies.

However, in the subsequent developments of tariff negotiations, investment pressure, shipbuilding cooperation, energy purchases, and supply chain restructuring, the U.S. began to discern "who are the true allies that share U.S. interests."

Tariffs were not merely trade tools but instruments for realigning alliances, and investments were mechanisms to draw industries into the U.S. Energy was a national security card to test allies.

In that context, the Lee Jae-myung administration lost trust by failing to fulfill its promises in tariff negotiations, and the Hormuz Strait crisis in March 2026 became a decisive test.

President Trump publicly pressured South Korea, Japan, and NATO countries to send warships to ensure the safety of the Strait and participate. The South Korean government not only effectively ignored this but also displayed an attitude that directly contradicted the strategic demands of the Trump administration.

Despite being the country with the most oil tankers trapped in the Strait, the South Korean government did not provide an immediate response. Instead, Lee Jae-myung, in such a situation, sided with Iran and criticized Israel, indicating a position that it was no longer the same ally to the U.S.

This was not a simple diplomatic mistake.

If South Korea, which is highly dependent on crude oil imports, not only fails to act during the Hormuz crisis, which affects its own vessels and energy supply chain, but also sides with Iran, an adversary of the U.S., and becomes an enemy of Israel, it is natural for Trump to view such a country as a trading partner rather than an ally.

For the Trump administration, South Korea is no longer easily perceived as an ally to be protected or given special consideration. The conclusion is that if an ally does not share the security costs, the U.S. has no reason to grant it special consideration in its industries and markets.

This is the reason for the DPA Section 303 measure on April 20, which involves government intervention and cannot be resolved through diplomacy at this point.

The Ripple Effects and Harsh Reality for the Entire Korean Economy

The DPA Section 303 measure could be an opportunity for Korean companies to enter the U.S. market. However, it presents a completely different issue for the Korean national economy.

This is because corporate sales and survival do not necessarily equate to the survival of domestic production bases and employment in Korea. If core production facilities and supply chains move to the U.S., even if the company names remain in Korea, what does the Korean economy actually gain?

The issue is not the orders themselves. The core question is where the orders are produced, whose jobs they are connected to, and within whose country's industrial base the money circulates.

Furthermore, if production occurs in the U.S., if Americans are employed, if U.S.-made components are required in industries elevated to security matters, and if U.S. government subsidies are received, that money will ultimately be spent within the U.S. and circulate within the U.S. economy.

In that case, even if companies make money, it is difficult to say that the benefits are a direct benefit to the Korean economy.

If the government and companies fail to establish proper response strategies for each DPA project, Korea risks falling into a quagmire where only its companies become globalized while its domestic industrial base becomes hollowed out, leading to job losses.

This is the true story that Korean media should be covering, and it is the harsh reality that the Korean economy faces today.

◆ Gene Cummings

Political columnist. After working at Channel 13 in Baltimore, Maryland, he served as Editor-in-Chief of 'The Sunday Times' (1994-1996) and Business Director of 'The Korean Weekly' (1996-2000). He founded 'Asia Post' in 2000. He currently works as a backend analyst in politics, diplomacy, and security for a private company performing government contracts.