Recall the headline-grabbing report last month that the US had cleared a plan for South Korea to build nuclear submarines. Nothing appears to have moved since then because various US governemnt departments have to give their opinions. Now President Trump’s posts on social media suggest the vessel will be built only in a US shipyard. There are also questions about the US transferring sensitive technologies.
StratNewsGlobal learns that the Korean firm Hanwha owns a shipyard in Philadelphia, Pennsylvania state, on the US east coast. If Hanwha starts building there, it will be the third submarine building yard in the US and will operate under tight US controls.
But as far as trade goes, ties are moving forward. According to a report in The Korea Herald, a joint fact sheet is being readied summarizing trade and security agreements between Seoul and Washington. It includes $25 billion in U.S. arms sales to South Korea although the terms “have yet to be finalized.”
Agency reports said any plan to buy arms would depend on the government’s assessment of “spending capacity and the overall security environment.”
Korea Herald quoted Finance Minister Koo Yoon-cheol as saying that the trade component of the fact sheet is nearly finalized, while the security portion “is still being coordinated.” He added that both documents would be signed simultaneously once all security terms are settled.
$350 Billion Investment Framework
The broader economic framework involves a $350 billion South Korean investment package in U.S. projects, of which $200 billion will be allocated to commercially viable ventures overseen by a committee chaired by U.S. Commerce Secretary Howard Lutnick, according to Kim Yong-beom, the president’s chief policy secretary.
To safeguard South Korea’s currency market annual investments will be capped at $20 billion, with the remaining $150 billion directed toward shipbuilding and infrastructure projects, including loans and guarantees.
In return, the United States will reduce tariffs on South Korean-made cars to 15 percent from the current 25 percent, aligning with reciprocal tariff rates for most other South Korean exports. Products such as pharmaceuticals, semiconductors, and aircraft parts will also benefit from lower duties or most-favored-nation treatment.
Political Divide
However, the political divisions persist over whether the agreements require parliamentary ratification. The ruling party argues the joint fact sheet and memorandum are not legally binding, while the opposition insists that, given the scale of financial commitments, parliament must formally ratify the deal under constitutional requirements governing treaties.
The government aims to present a special bill in November to provide legal grounds for the investments, signaling that both economic and defense cooperation with Washington remain central to Seoul’s long-term strategy.
