The companies announced on Monday that Huntington Ingalls, a U.S. military shipbuilder, and HD Hyundai Heavy Industries of South Korea have signed an agreement exploring opportunities to increase production for commercial and defense projects.

The companies signed an agreement to explore areas of innovation, and maximize their production efficiency by combining resources.

The U.S. wants to stop China from dominating the shipbuilding industry. The U.S. trade representative's investigation in January found that China's dominance of the shipbuilding sector was "unreasonable", and therefore "actionable," under United States trade laws.

Donald Trump plans to charge import fees for goods arriving on ships made in China and to offer tax credits as a way to revive domestic shipbuilding.

Companies say that the agreement between Huntington and HD Hyundai Heavy Industries is expected to strengthen the maritime industrial base in both the U.S.A. and South Korea. This comes as many countries increase their defense spending due to growing geopolitical tensions.

According to its website, HD Hyundai Heavy Industries holds a market share in shipbuilding of around 10%.

(source: Reuters)