April 7 (Reuters) - U.S. military shipbuilder Huntington

Ingalls and South Korea's HD Hyundai Heavy Industries

have signed an agreement to explore opportunities to

increase production in commercial and defense projects, the

companies said on Monday.

The companies signed a memorandum of understanding to look

into areas of innovation and maximize production efficiency

using their combined resources.

The U.S. is looking to deter China's dominance in the

shipbuilding sector. In January, the U.S. Trade Representative's

probe found China's shipbuilding dominance was "unreasonable"

and "actionable" under the United States' trade laws.

President Donald Trump is planning to levy fees on imports

arriving on Chinese-made ships and offer tax credits to

resuscitate domestic shipbuilding.

The agreement between Huntington and HD Hyundai Heavy

Industries will help strengthen the collective maritime

industrial base of both the U.S. and South Korea, the companies

said, as countries around the world are pushing up defense

spending in the wake of growing geopolitical tensions.

HD Hyundai Heavy Industries has a global market share of

about 10% in shipbuilding, according to its website.