WASHINGTON — President Donald Trump is expected to announce Tuesday that Anduril Industries and the federal government will invest a combined $6.6 billion to manufacture critical components for Virginia-class submarines in Baltimore, part of a broader effort to strengthen US maritime power.
The planned shipyard, called Arsenal 2, will receive $3.7 billion in private investment from California-based Anduril, along with $2.9 billion tied to a US Navy contract with the defense company.
“This delivers on President Trump’s promise to bolster America’s defense industrial base while revitalizing our manufacturing industry, creating over 13,000 direct and indirect jobs and driving $2 billion in annual economic output,” White House deputy press secretary Anna Kelly said.
Kelly said the initiative supports the president’s maritime action plan, unveiled earlier this year, which calls for rebuilding US shipbuilding capacity, expanding workforce education and training, safeguarding the maritime industrial base and removing regulations viewed as burdensome by the industry.
The facility is slated for Sparrows Point, a site that once housed a shipyard and the former Bethlehem Steel plant. It will initially manufacture torpedo tubes before expanding to ship sections, including submarine bows, sterns and other major components, according to an industry official.
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The US Navy currently operates 26 Virginia-class submarines and is expected to maintain a production pace of two boats annually.
Powered by nuclear reactors, Virginia-class attack submarines succeeded the Cold War-era Los Angeles-class fleet and are central to the Navy’s undersea warfare strategy.
“China competes with us,” a senior administration official said. “Not only at sea … going navy to navy, but also, you know, the way that China … very strongly dominates in the area of commercial shipping.”
Trump signed an executive order in April 2025 aimed at restoring US maritime dominance, with a particular focus on challenging China’s influence over global commercial shipping.
In April 2026, the Navy scrapped a Biden-era plan to modernize the USS Boise, a Los Angeles-class submarine, and redirected billions of dollars toward Virginia-class submarine construction.
During Joe Biden’s presidency, the Navy awarded a $1.2 billion contract to overhaul the Boise. The project’s projected costs, however, rose sharply in the years that followed.