The United States and South Korea have unveiled a landmark trade and defense agreement that includes a $150 billion South Korean investment in the U.S. shipbuilding sector, coupled with plans to “move forward” on the construction of nuclear-powered submarines. The deal, announced on November 14, 2025, represents a major expansion of military cooperation between Washington and Seoul, alongside commitments in artificial intelligence, nuclear technology, and shipbuilding.

South Korea Secures U.S. Approval for Nuclear Submarines

South Korean President Lee Jae Myung confirmed that Seoul has received U.S. approval to build nuclear-powered attack submarines, marking a historic development for the Republic of Korea’s naval capabilities. “The United States has given approval for the ROK to build nuclear-powered attack submarines,” Lee said at a news conference.

The agreement also expands South Korea’s authority over uranium enrichment and spent nuclear fuel reprocessing, strengthening Seoul’s civilian and military nuclear programs. Analysts note that such capabilities position South Korea among a select group of nations with advanced nuclear naval technology.

Trade Investments and Tariff Reductions

Under the agreement, South Korea will invest $200 billion in U.S. industrial sectors in addition to the $150 billion earmarked for shipbuilding. In exchange, Washington has lowered trade tariffs on Korean goods from 25% to 15%, promoting bilateral economic growth.

“One of the greatest variables for our economy and security – the bilateral negotiations on trade, tariffs, and security – has been finalized,” President Lee said.

Naval Expansion Plans

Yonhap News Agency reported that South Korea aims to acquire “four or more 5,000-ton conventionally armed, nuclear-powered submarines by the mid-2030s.” A joint fact sheet highlighted plans for further collaboration through a shipbuilding working group, intended to increase the production of both U.S. commercial ships and combat-ready military vessels.

Regional Security Implications

China has expressed concern over the deal, noting that it impacts the global nonproliferation regime and the stability of the Korean Peninsula. “Such a partnership goes beyond a purely commercial agreement, directly touching on nonproliferation and regional stability,” said China’s Ambassador in Seoul, Dai Bing.

North Korea has not issued an immediate response but has historically criticized U.S.–South Korea military cooperation, warning that such moves could be perceived as preparation for an invasion. Analysts predict Pyongyang may respond to the nuclear submarine program with escalatory rhetoric or military demonstrations.

Construction Location Clarified

While U.S. President Donald Trump previously suggested that South Korea’s nuclear submarines could be built at Philadelphia Shipyards in the United States, South Korea’s national security adviser Wi Sung-lac clarified that construction will occur entirely in South Korea. “From start to finish, the leaders’ discussion proceeded on the premise that construction would take place in South Korea,” Wi said.

Strategic and Technological Significance

The development of nuclear-powered vessels represents a major boost for South Korea’s naval and defense industries. Experts say it enhances regional deterrence capabilities, strengthens South Korea’s strategic autonomy, and advances its technological edge in submarine warfare.

By combining trade incentives with high-tech military cooperation, the U.S.–South Korea agreement underscores the deepening alliance in the Indo-Pacific amid rising tensions on the Korean Peninsula and growing Chinese regional influence.