Trump Announces 40% Taxpayer Stake in New $6.6 Billion Submarine Shipyard

President Donald Trump announced Tuesday that the U.S. government will take a 40% stake in a new shipyard being constructed in Baltimore, a move that injects a substantial government ownership element into the $6.6 billion initiative to expand Virginia-class attack submarine production.

"The ultimate proof of our commitment to ensuring the shipyard's enduring success: American taxpayers will receive a 40 percent stake in the new shipyard," Trump stated during remarks at Sparrows Point. "We get 40 percent."

The stake will be in a new subsidiary created to operate the Arsenal-2 shipyard, rather than in the defense technology company Anduril itself. Details regarding the rights associated with the government's 40% interest, the specific government contributions, and potential returns have not yet been publicly released.

This arrangement is part of a broader $6.6 billion effort to increase the production of Virginia-class attack submarines, addressing a perceived shortfall in U.S. capacity compared to China's rapidly growing naval shipbuilding. Anduril is investing $3.7 billion of its own capital to establish the facility and its manufacturing capabilities, while the Navy is projected to spend up to $2.9 billion on the submarines produced.

The initiative aims to close a persistent gap in U.S. submarine production. American shipyards currently deliver approximately 1.3 Virginia-class attack submarines annually, falling short of the Navy's goal of two per year. This target is not expected to be met until around 2032. Once operational, the Arsenal-2 shipyard is anticipated to contribute roughly 9 million labor hours annually to the submarine industrial base, potentially increasing production capacity by approximately 15%, according to an administration official.

An industry official emphasized that Anduril would finance the new production capacity, with the government purchasing the resulting output. "We feel the government [is] buying the results of what we're able to produce," the official said.

The submarine production shortfall is part of a larger shipbuilding disparity between the U.S. and China. China dominates global commercial shipbuilding, accounting for over half of the world's output, while the U.S. contributes a fraction of 1%. This gives China a significant industrial base that can also support military shipbuilding.

Anduril intends to commence production with critical components such as torpedo tubes, which a senior administration official described as a current bottleneck. The company's long-term plan includes manufacturing larger submarine modules and sections at the Arsenal-2 facility. The shipyard, spanning over 2 million square feet, is expected to create 3,100 direct jobs and approximately 11,000 indirect jobs nationwide, with operations slated to begin around 2030.