South Korea and the United States Sign $350 Billion Strategic Investment MOU

Amy Han

The United States and South Korea unveiled new trade agreement terms outlining a $150 billion South Korean commitment to bolster the U.S. shipbuilding industry, along with an additional $200 billion designated for strategic industrial investments.

This came after the late October meeting between South Korean President Lee Jae Myung and U.S. President Donald Trump, where the two leaders agreed to lower U.S. tariffs on South Korean imports from 25% to 15%. The framework for the deal was formalized in a memorandum of understanding signed by South Korean Industry Minister Kim Jung-kwan and U.S. Commerce Secretary Howard Lutnick. The two governments agreed to identify which projects will qualify for the $200 billion in direct investment by January 2029, well within President Donald Trump’s current term.

A joint consultative structure will guide project selection, tariff reductions, and follow-through on trade adjustments. Looking ahead, the allies plan to deepen collaboration on advanced defense systems—including nuclear-powered submarines, enriched uranium technologies, and expanded U.S. arms purchases—while strengthening supply chain resilience through joint shipbuilding, workforce training, and industrial partnerships. 

According to Lee, the two governments agreed to invest only in commercially sound projects that fall within their economic means, alleviating concerns about what some perceived as “de facto aid.” Looking ahead, the United States and South Korea plan to expand their partnership from traditional strategic industries—such as shipbuilding and nuclear energy—to cutting-edge sectors, including AI and semiconductors.

Lee also highlighted that the two sides also agreed to jointly pursue nuclear-powered submarine construction and that South Korea secured U.S. support for expanding its authority over uranium enrichment and spent-fuel reprocessing. In addition, both governments will explore regulatory changes that would allow U.S. commercial and naval vessels to be built in Korea, creating a foundation for shared growth in the shipbuilding industry.

With reaffirmed commitments to the U.S. Forces Korea, regional stability, and coordination on North Korea policy, the two countries are positioning the alliance to function not only as a security partnership but as a comprehensive economic-security framework for the coming decade.

South Korea’s Nuclear Submarines and its Regional Security Implications

Sheewon Min

On November 13, the White House released a factsheet detailing the South Korea–U.S. trade agreement reached following the summit between President Lee Jae Myung and U.S. President Donald Trump in Gyeongju last month. Notably, the factsheet states, “The U.S. has approved South Korea’s construction of nuclear submarines,” marking a significant milestone in South Korea–U.S. relations amid rising regional tensions, with a nuclear-armed North Korea to the north and an increasingly assertive China to the west.

Currently, only six countries possess nuclear-powered strategic submarines: the United States, China, Russia, the United Kingdom, France, and India. South Korea’s existing submarine fleet comprises approximately 20 vessels, all of which are diesel-powered and require frequent surfacing, limiting operational range and speed. Nuclear-powered submarines, by contrast, can operate at greater distances and sustain higher speeds for extended periods, providing strategic advantages in deterrence and rapid response.

North Korea, for its part, has reportedly been advancing a nuclear submarine program, potentially with assistance from Russia. In March 2025, Pyongyang released images purportedly showing a nuclear-powered submarine under construction, with Kim Jong Un visiting the shipyard. North Korea is projected to operationalize these submarines within the coming years, complementing its estimated arsenal of approximately 50 nuclear weapons.

Despite the strategic significance, substantial challenges remain. The transfer of nuclear submarine technology remains highly complex; Australia’s experience, for instance, required more than two years of legislative and diplomatic negotiations with the United States. Analysts have noted that ambiguities in the fact sheet could lead to divergent interpretations by Seoul and Washington, particularly regarding sensitive defense provisions and the feasibility of South Korea’s nuclear submarine program.

Furthermore, Beijing has voiced concerns regarding South Korea’s submarine plan. Following the announcement, Chinese Ambassador to South Korea Dai Bing urged Seoul to “deal with this issue prudently, taking into consideration the concerns of all sides,” highlighting ongoing diplomatic engagement. Dai emphasized the continued complexity and sensitivity of security dynamics in the region, reaffirming the “One China” principle and cautioning against perceived external interference in China’s domestic affairs, particularly regarding Taiwan. It remains uncertain how South Korea will respond to potential pressure from Beijing, given the country’s experience of Chinese retaliation following the deployment of the Terminal High Altitude Area Defense (THAAD) system less than a decade ago.

South Korea’s approved development of nuclear-powered submarines reflects both an evolution in its defense posture and a broader recalibration of regional security dynamics. While the program promises to enhance Seoul’s strategic capabilities and deterrence against North Korea, it also introduces new challenges in managing U.S.-China relations and navigating domestic and international expectations. The successful implementation of this initiative will depend on careful diplomatic coordination, technological feasibility, and the broader interplay of great-power competition on the Korean Peninsula. 

South Korea Approves Ambitious New Climate Target in Time of COP30

Alexander Eid

The cabinet of South Korean President Lee Jae Myung officially adopted a set of new climate targets – also known as nationally determined contributions (NDCs) – on November 11, one day into the 2025 UN Climate Change Conference (COP30). By setting a goal of cutting emissions by 53%-61% by 2035 compared to 2018 levels, South Korea’s new NDC figures reflect the Lee administration’s aggressive, renewables-centered energy agenda but also poses serious questions in terms of achievability. 

South Korea’s previous NDC, as updated last in 2023 by the previous administration of President Yoon Suk Yeol, called for a 40% overall reduction by 2030. While a 13-21 percentage point increase may seem on its surface to be ambitious in and of itself, a top-level comparison hides the true levels of the new targets’ ambition. 

By sector, the electricity generators face the greatest increase in terms of total magnitude: going from 45.9% to a minimum of 68.8%. This dovetails with the Lee administration’s rhetoric on expanding renewables – primarily wind and solar – while investing in commensurate grid infrastructure. Of course, the dire financial state of South Korea’s national power utility KEPCO will pose a challenge to this build out, but solutions to implement a nearly 70% cut do exist. 

In comparison the industrial and transportation sectors face greater challenges in that they will be responsible for a more significant reduction by proportion. The industrial sector will be expected, at minimum, to more than double its contributions from 11.4% to 24.3%. Meanwhile, the transportation sector will face a similar increase from 37.8% to 60.2%, again under the minimum 53% cut scenario. These areas pose far greater decarbonization challenges, owing primarily to technological and economic limitations. 

In addition to these oft cited concerns, however, for contemporary South Korea and the Lee government, two major hurdles stick out. First, the plan lacks any reference to nuclear power, traditionally a core component of the country’s energy transition plan but one which has received a cold reception from Lee administration officials. While Seoul appears averse to pursuing an outright nuclear phase-out given its recent approval of the continued operation of the Kori-2 reactor until 2033, achieving the 2050 net zero target necessitates large-scale nuclear power working in tandem with renewables. For South Korea, without new nuclear power plants, the gap left by removing fossil fuels will need to be filled exclusively by renewables, thereby presenting critical supply chain risks. 

Second, and perhaps more pressingly for President Lee, his green energy goals will need to be thoughtfully aligned with his other top policy priority: AI. Indeed, spending on AI – including data centers, R&D, and infrastructure – formed the core of Lee’s recent budget address to the National Assembly. However, with AI comes power problems. South Korean government sources – last updated in 2024 before the Lee government’s ambitious AI push – assess power demand from data centers to more than triple by 2038. Since then, Lee’s full throated embrace of AI and related promotion policies have likely pushed this figure even higher.

If the Lee government aims to meet its goal of becoming a top three international powerhouse for AI, it will need to calibrate its energy policy accordingly. This means actionable implementation plans and, likely, significant government spending on incentives and other mechanisms to achieve the new NDCs. These concrete measures have yet to materialize, but they will prove crucial for South Korea’s climate and economic trajectory. 

This Week in Korean History

In late November in the year 1400, the second king of Joseon abdicated, leaving the throne open for King Taejong to become monarch. Though ruthless, Taejong made key reforms during his reign, such as increasing communication between the monarchy and the citizenry and issuing state identification for males over 16. More importantly, however, he laid the groundwork for his third son – Yi Do – to take control in 1418. Upon becoming king, Yi Do would become known as Sejong and eventually Sejong the Great – one of the most important leaders in Korean history and in honor of whom the Sejong Society is named.