Originally published: July 6, 2026 | Updated: July 7, 2026
Today, July 6th. The global defense industry is holding its breath.
Canada is expected to announce the preferred bidder for CPSP — its next-generation submarine program worth up to $44 billion USD in construction costs alone — today. Hanwha Ocean of Korea and Germany's TKMS have been locked in a head-to-head competition for nearly a year, and the verdict was widely expected before Canadian Prime Minister Mark Carney departs for the NATO Summit in Ankara on July 7th, according to Canadian broadcaster CTV.
By the time you read this, the result may already be out.
Whatever it turns out to be, the fact that Canada deliberated this carefully, this long, says something in itself. It means the two contenders were evenly matched — and that this decision carried real weight for Canada, too.
What makes this even more striking is that Canada isn't the only front. Across the Pacific, the United States has been sending its own signals toward Korean shipyards. An industry once written off as dying — how did it end up at the center of so much global attention?
Canada: A Fight Where an Entire Nation Is on the Table
Canada's navy currently operates four Victoria-class submarines, purchased secondhand from Britain back in 1998. They have aged so poorly that only one remains operationally ready today. A senior Canadian naval commander put it plainly: new submarines were needed "practically yesterday." To replace them, Canada plans to acquire up to 12 new vessels. The construction cost alone runs to roughly $44 billion USD — and when thirty to fifty years of maintenance are factored in, the total lifecycle cost reaches up to $88 billion. It is the largest defense procurement in Canadian history.
Two bidders remain: Korea and Germany.
On the surface, this looks like a competition over submarine performance. But Canada's official evaluation criteria tell a different story. Maintenance capability carries 50% of the total weight. The submarine platform itself accounts for just 20%. Financing takes 15%, and strategic and economic partnership the remaining 15%. In other words, what matters most is not the vessel — it's who can sustain it, and what they leave behind for Canada.
Hanwha Ocean zeroed in on exactly that. It proposed delivering the first submarine within six years of contract signing — three years faster than the typical nine-year timeline. On top of that, it pledged hundreds of millions of dollars in investment to Canadian steelmaker Algoma Steel, direct production of armored vehicles on Canadian soil, and a joint defense venture with a Canadian auto parts manufacturer. KPMG estimated that a Hanwha Ocean win would generate over 500,000 jobs across Canada between 2026 and 2044, contributing more than $120 billion to Canadian GDP. This was not a pitch to sell a submarine. It was a pitch to become part of Canada's industrial future.
Germany did not step back. TKMS offered to reassign submarine production slots originally reserved for its own navy and Norway's, fast-tracking deliveries to Canada and bringing its proposed timeline close to Korea's. Germany's longstanding NATO alliance network — and its decades of submarine exports to allied navies — remained its most powerful argument.
For a time, splitting the order between both countries was floated as a possible compromise. Canada's Defense Minister ended that conversation. Running two different submarine fleets, he said, would double maintenance costs, complicate parts supply, and create unnecessary operational burden. Winner takes all.
This is not a transaction. It is a decision about who Canada will build its industry, its security, and its jobs with for the next several decades. No wonder it took this long.
The United States: Korea's Calculated Strike at America's Weak Spot
Around the same time, a very different kind of courtship was unfolding across the Pacific.
June 2026, G7 Summit. President Trump turned to President Lee Jae-myung with a question that cut straight to the point: could Korea build ten U.S. Navy vessels, and fast?
Reading this as "America reaching out to Korea for help" only tells half the story. The fuller story is that Korea played this card first.
When Trump returned to office, Korea found itself squarely in the crosshairs of a 25% tariff threat. As a country running a significant trade surplus with the United States, Korea needed to offer something large and convincing — something that went beyond buying more American weapons or raising its defense cost-sharing contribution. What Korea identified was America's blind spot.
Once the world's most powerful shipbuilding nation, the United States had watched its shipbuilding industry hollow out over decades. Naval vessels were being built behind schedule. Repairs were backlogged. While China was rapidly expanding its fleet, the U.S. Navy was confronting the hard limits of what American shipyards could actually deliver. Korea saw the opening and stepped into it precisely. The framing was deliberate: we will help make America a shipbuilding power again.
Shipbuilding cooperation became the centerpiece of the Korea-U.S. tariff negotiations. That is how MASGA — Make American Shipbuilding Great Again — was born: a $150 billion investment framework, roughly 217 trillion Korean won, agreed upon as the anchor of a broader trade deal.
Things moved quickly after that. The day after the agreement was announced, the Chief of Naval Operations flew directly to shipyards in Ulsan and Geoje. This year, HD Hyundai Heavy Industries and Hanwha Ocean each secured two U.S. Navy maintenance contracts, surpassing their entire previous year's results within a single quarter.
Not everything is smooth. A final version of the U.S. National Defense Authorization Act quietly dropped a provision that would have given preferential treatment to Korean shipyards — a sign that domestic political resistance inside America is real, regardless of how urgent the need may be.
Still, the direction is clear. Korea extended its hand first. America took it.
So, Why Korea — Again?
Competition with Canada. Cooperation with the United States. The two situations point in opposite directions — yet both arrive at the same question.
Who can actually build this, on time?
For a United States whose shipbuilding capacity has eroded, and for a Canada whose aging fleet is down to a single operational submarine, the answer keeps pointing to the same place. Proven technology. Production capacity that delivers on its promises. Right now, few countries can offer both at once.
So, Why Korea?
Not long ago, Korean shipbuilding was being written off as a sunset industry. Today, the United States and Canada — for entirely different reasons — are both looking to Korea at the same time.
How did this reversal happen? In the next episode, we'll look at the story behind it — the crisis, the near-collapse, and the unlikely comeback.
Curious about Korea?
So am I.
Let's keep growing together. - Super Garden Korea
A personal note: I own a small number of Hanwha Ocean shares. The result was a win for Germany — and the stock dropped more than 22%.
That said, it's hard to call this a straightforward defeat. Canada's Prime Minister stated directly that "both candidates met the demanding requirements of the Canadian Navy." Korea's Defense Acquisition Program Administration added that "a country that once learned submarine technology from Germany competed on equal footing with its teacher in every technical dimension." The prevailing analysis is that Korea didn't lose to Germany — it ran into the wall of NATO alliance politics.
It may take a while for my stock price to recover. But the message this competition left in the global defense market seems clear: Korean submarines are now a player in the major leagues. I'll keep cheering them on.
Further Reading
Global Economic – Canada's $88B Submarine Contract: Winner to Be Announced July 6 https://www.g-enews.com/article/Global-Biz/2026/07/202607040517143867e8b8a793f7_1
YTN – Canada Signals Split Order "Unlikely" in Submarine Bid https://www.ytn.co.kr/_cs/_ln_0104_202606300555390644_005.html
Kookmin Ilbo – Diplomatic Power Will Decide the K-Submarine Race https://www.kmib.co.kr/article/view.asp?arcid=1780226226
Global Economic – U.S. Navy Hands Korea Next-Generation Warship Design https://m.g-enews.com/view.php?ud=202604282106365580fbbec65dfb_1
Bloter – MASGA: Korea and the U.S. Open a New Chapter in Shipbuilding https://www.bloter.net/news/articleView.html?idxno=666292
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