U.S., South Korea, and Japan to Hold Freedom Edge Drills in September

Sheewon Min

The United States, South Korea and Japan will conduct their annual trilateral military exercise, Freedom Edge, from Sept. 7 to 11, South Korea’s Joint Chiefs of Staff (JCS) announced on August 28. The multi-domain exercise will take place in international waters east and south of South Korea’s Jeju Island and will focus on strengthening the three countries’ ability to respond to North Korean nuclear and missile threats.

The drills will come shortly after Seoul and Washington scaled back their annual Ulchi Freedom Shield exercise following an order from U.S. President Donald Trump. Trump called for the reduction partly because large-scale exercises could send an “inappropriate and hostile” signal to North Korea, as his administration seeks to revive direct dialogue with North Korean leader Kim Jong Un. The decision raised questions over whether Freedom Edge would proceed as scheduled, but the trilateral exercise is now set to go ahead.

Freedom Edge was established following the August 2023 Camp David summit, where the leaders of the United States, South Korea and Japan agreed to strengthen trilateral security cooperation. The first exercise was held in June 2024. The drills have since expanded to cover areas including ballistic-missile defense, air and maritime operations, anti-submarine warfare and cyber defense. The exercise is described by the three countries as defensive and intended to strengthen their ability to respond to North Korean nuclear and missile threats.

North Korea has consistently condemned joint U.S.-South Korean and trilateral military exercises as preparations for an invasion, despite the allies’ characterization of them as defensive. Pyongyang has also shown little interest in Trump’s recent efforts to restart diplomacy. Kim Yo Jong, Kim Jong Un’s sister and a senior North Korean official, said last week that Pyongyang had “no interest” in the reduction of U.S.-South Korean drills. North Korea has separately threatened a “serious, immediate and powerful response” over Washington’s approval of a possible $125 million sale of Sidewinder missiles and related equipment to South Korea.

The decision to proceed with Freedom Edge illustrates the difficulty of separating deterrence from diplomacy on the Korean Peninsula. While reducing exercises may be intended to create space for negotiations with Pyongyang, maintaining a visible level of military cooperation remains important for assuring South Korea and Japan of the U.S. security commitment. The continuation of Freedom Edge therefore appears less like a rejection of diplomacy than an attempt to preserve the allies’ deterrence posture while leaving room for renewed engagement with North Korea. The key question will be whether Washington can maintain that balance without allowing either side of the strategy—deterrence or diplomacy—to undermine the other.

U.S. Seeks 25% Cost Increase for Korea’s First Strategic Investment Project

Amy Han

The U.S. recently requested a 25% increase in the cost of a gas combined-cycle power plant in Texas, which is expected to be South Korea’s first strategic investment project in the U.S. The estimated cost would increase from $20 billion to $25 billion. The request has added to concerns over the project, especially as U.S. investment conditions continue to change and the Korea-U.S. Strategic Investment Steering Committee has not met again in nearly two months.

The request comes as electricity demand rises across the southern United States, largely due to the rapid growth of AI data centers. Higher construction costs are also contributing to the proposed increase. At the same time, a larger project budget would mean more South Korean capital flowing into the U.S., which could help Korea move forward with its broader investment commitments.

Still, the proposed increase has raised concerns within the South Korean government. Because annual funding is capped at $20 billion, allocating more money to the first project could leave less available for projects that follow. Officials are also considering whether similar cost increases could be requested for future investments in sectors such as energy and semiconductors. These sectors represent $200 billion of the $350 billion investment plan included in the bilateral memorandum of understanding (MOU).

Questions also remain over how the investments will be structured and how returns will be shared. Under the current MOU, the special-purpose vehicle overseeing the strategic investments would be fully owned by the U.S. This has raised questions about whether South Korean companies would receive equity stakes or voting rights in the projects they help finance. Without an ownership stake, South Korea could end up serving mainly as a source of funding rather than as an investor with a direct role in project decisions.

The negotiations are further complicated by staffing changes within South Korea’s investment management structure. Several officials involved in overseeing or implementing the U.S. investment program have recently left or moved to other positions, while the committee responsible for reviewing potential projects has not met since its first meeting in late June. 

At the same time, Washington is reportedly pushing Seoul to move quickly on announcing its initial investment package, adding pressure to resolve the remaining financial and procedural issues. The U.S. has been pushing South Korea to move quickly on its $200 billion investment commitment, including finalizing the first project. 

However, South Korea wants to review each project’s financial viability before committing funds. Officials are concerned that agreeing to the U.S. terms without fully assessing costs, interest rates, and expected returns could create an unfavorable precedent for future investments. A final decision is expected after Korea receives additional information from the U.S. and completes its review of the project’s costs and profitability.

This Week in Korean History

On September 1, 1952, South Korea introduced compulsory military service.