United States has granted approval for South Korea to develop its own nuclear-powered submarines, a decision solidified through an expansive new trade agreement announced by both governments this week. The deal, designed to deepen security ties and industrial cooperation, involves $350 billion in planned South Korean investments—$200 billion to be provided as annual cash infusions and another $150 billion earmarked for expanding shipbuilding ventures and technology partnerships.
Under the terms established by South Korea’s Industry Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick, South Korea will limit annual direct funding to $20 billion to guard against market volatility, with flexibility to further adjust investments if economic turbulence arises. In exchange, Washington will scale back tariffs on major South Korean exports from 25% to 15%, effective retroactively from November 1, and promote broader cooperation on artificial intelligence, semiconductors, and uranium enrichment for peaceful use.
Security analysts note that the nuclear submarine program, a longtime aspiration for Seoul, would provide the country with advanced vessels capable of remaining submerged for extended periods—an important advantage amid escalating North Korean weapons threats and suspected Russian collaboration with Pyongyang. The nuclear-powered fleet is regarded as a deterrent not only by South Korea’s leadership but also as a crucial step in preserving regional stability on the Korean Peninsula.
However, the agreement quickly drew a critical response from China, which cautioned that the strengthened US-South Korea alliance could disrupt the region’s delicate security dynamics and raised nonproliferation concerns. South Korean officials clarified that construction would occur domestically under the “joint fact sheet” principles, mirroring aspects of the AUKUS nuclear submarine partnership between the US, UK, and Australia.
In parallel to defense advancements, the bilateral agreement strengthens industrial supply chains and energy infrastructure, including US support for South Korea’s ambitions in civil uranium enrichment and spent nuclear fuel reprocessing. Both countries reaffirmed their commitment to enduring economic and security collaboration, marking a new chapter in their alliance.