The CEO of Huntington Ingalls Industries recently downplayed how much impact President Donald Trump ’s 25% aluminum and steel tariffs would have on the shipbuilding supply chain.
Huntington Ingalls Industries (HII) CEO Chris Kastner also said adding Australian suppliers to submarine production under the AUKUS agreement will help bolster a fragile supply chain. He argued that as a long-term shipbuilder HII is different from other companies because it both orders metal parts years in advance and also buys and builds in America.
“Ultimately, if tariffs bring more manufacturing into the United States and creates more jobs for manufacturing workers in the United States, I’m happy, because we need to broaden that base. We need to have more workers, more manufacturing workers in the United States,” Kastner told reporters, including Exchange Monitor affiliate publication Defense Daily, during a media roundtable Wednesday April 2 ahead of next week’s Sea Air Space conference in National Harbor, Md.
His comments came before Wall Street stocks took a dramatic nosedive on Thursday and Friday of last week.
Despite Kastner’s statements trying to minimize the effect from the tariffs, a Navy official admitted to a Senate panel in March, when the steel and aluminum tariffs were first imposed, that they very well could drive up ship costs.
Acting Assistant Secretary of the Navy for Research, Development, and Acquisition Brett Seidle told a Senate panel in 2023 about half of the aluminum and a third of its steel for Navy shipbuilding came from Canada and “clearly, tariffs in those areas could drive costs.”
During the hearing, Sen. Tim Kaine (D-Va.) asked if it would be easy or hard to go from sourcing 66 percent to 100 percent domestic steel in shipbuilding. When Seidle said he did not have the specific information on that change, Kaine responded, “it’d be hard.”
Separately, Kastner said the utility in adding Australian companies to the submarine industrial base under AUKUS adds needed capacity to a fragile industrial base but will not lower prices.
“So I don’t think there’s an immediate impact,” Kastner said. I think having additional capacity in the submarine industrial base is only positive. And so if there are suppliers in Australia that are qualified to produce sub safe equipment and can participate. It’s only positive.”.
Last month, the Australian government awarded HII’s Australian subsidiary a $6 million contract. The deal is to deliver a new submarine supplier qualification pilot to help small and medium Australian companies qualify to enter the U.S. submarine industrial base supply chain.
Also, last month HII named VEEM Ltd. as the first company to join the supplier program. VEEM already has decades of experience in precision casting for the Australian Collins-class submarine.
“Do I think it’s going to be a significant impact to cost? I don’t, not at this point, but we have a very fragile supply chain right now, so having additional suppliers that can produce this equipment, I think, is only positive,” Kastner continued.
This article was originally published by Exchange Monitor affiliate Defense Daily.
