The U.S. government is demanding investments exceeding $350 billion, prompting the South Korean government to focus on defense strategies.
According to reports from Yonhap News and others on September 8, the Ministry of Trade, Industry and Energy recently provided a confidential update to the National Assembly regarding the progress of follow-up negotiations on Korea-U.S. strategic investments.
The key projects under negotiation between the two countries include the construction of the Texas Encinial gas combined cycle power plant, the construction of eight large nuclear power plants, and the development of liquefied natural gas (LNG) in Alaska.
Last year, South Korea pledged a total investment of $350 billion in the U.S., which included $150 billion for shipbuilding cooperation and $200 billion for strategic investments, contingent on reducing tariffs from 25% to 15%. Of this, the available funds for strategic investments currently under negotiation amount to $200 billion.
The challenge arises as the U.S. has increased project costs, pushing the demands beyond the available limits. The construction of the Encinial gas combined cycle power plant, a leading candidate for the first major investment in the U.S., is currently negotiating around $22 billion. Additionally, the costs associated with the nuclear power projects have emerged as the biggest hurdle in the negotiations.
The government is actively considering the construction of eight large nuclear power plants, including two Korean-style reactors, in response to U.S. demands. Each large nuclear power plant has a project cost of approximately $15 billion, meaning that if all eight are built, a total of $120 billion will be invested. The combined total for the Encinial power plant and the nuclear projects alone exceeds $142 billion, accounting for 71% of the available funds.
Furthermore, the inclusion of the Alaska LNG development project, a priority for President Donald Trump, makes exceeding the $200 billion limit unavoidable, according to consensus.
A representative from the Ministry of Trade, Industry and Energy stated, "We expect to finalize detailed negotiations before the report to the National Assembly on the 17th, but depending on the outcome of the negotiations, the schedule for signing the MOU on the 18th may be delayed."
* This article has been translated by AI.
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