[Journalism Internship] Trump's energy policies open door for Korea, but may invite financial burden
Published: 07 Dec. 2025, 14:44
Updated: 07 Dec. 2025, 15:53
![U.S. President Donald Trump, with U.S. Treasury Secretary Scott Bessent, right, speaks during a talk with President Lee Jae Myung, unseen in this photo, at the Gyeongju National Museum in Gyeongju, North Gyeongsang, on Oct. 29. [AP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/12/07/9242a68e-63c1-4aab-ac08-292d0d8bc590.jpg)
U.S. President Donald Trump, with U.S. Treasury Secretary Scott Bessent, right, speaks during a talk with President Lee Jae Myung, unseen in this photo, at the Gyeongju National Museum in Gyeongju, North Gyeongsang, on Oct. 29. [AP/YONHAP]
Moon Jeong-won, Colin Doh, Lee Shin-ho
The U.S. push to revive its nuclear industry is opening lucrative doors for Korean companies — and posing difficult questions for Seoul about how closely to align its economic and climate ambitions with Washington’s energy agenda.
U.S. President Donald Trump’s energy agenda to center energy supplies on projects like the nuclear power plants and the Alaska liquefied natural gas (LNG) project has created both opportunities for economic growth for Korea but also raised concerns over Korea’s dependency on U.S. priorities.
Trump’s firm determination for fossil fuels has been demonstrated time and time again, beginning from his infamous statement, “Drill, baby, drill,” during his inaugural address, and re-exemplified by the U.S. withdrawal from the Paris agreement in January 2025.
On Oct. 29, Korea and the United States finalized the logistics for tariff agreements in essential industries, easing tensions over trade and Korea’s role in the energy supply of the United States.
After the Korea-U.S. summit, Seoul's presidential aide, Kim Yong-beom, announced that the "reciprocal" tariffs will be reduced from 25 percent to 15 percent, signaling a shift in the two countries’ approach to trade and investment.
The finalized tariff negotiations offered preferential treatment for imported components critical to the energy supply of the United States, such as the nuclear and oil sectors, reflecting Trump's strategic focus on traditional energy sources. This agreement is due to the fact that the United States does not have the capability to independently develop its own full energy supply. Under this framework, Korea is gaining strategic and economic benefits by having increased exports with reduced tariffs, though questions remain about whether these advantages outweigh the financial support required by the United States.
U.S. President Donald Trump, with U.S. Treasury Secretary Scott Bessent, right, speaks during a talk with President Lee Jae Myung, unseen in this photo, at the Gyeongju National Museum in Gyeongju, North Gyeongsang, on Oct. 29. [AP/YONHAP]
Nuclear Energy: Korea in the U.S. SMR market
On Aug. 25, shortly after President Lee Jae Myung took office, the first Korea-U.S. summit took place.
In the Korea-U.S. Business Roundtable, Korea's Ministry of Trade, Industry and Energy concluded 11 memorandums of understanding in five fields including shipbuilding, nuclear plants, airlines and LNG. The nuclear power plant factor is both a positive and a negative for Korea.
Korea Hydro & Nuclear Power (KHNP) and Doosan Enerbility cooperated with X-Energy and Amazon Web Services on future planning for small modular reactor (SMR) design, construction, operation, supply chain development, investment and market expansion. With that, KHNP was incorporated into nuclear power plant and uranium enrichment plant construction in the United States.
After the Three Mile Island accident occurred outside Harrisburg, Pennsylvania, in 1979, due to a lack of a proper cooling facility, the United States paused its insistence on the supply of skilled manpower, thus collapsing the nuclear industry environment. Civic concern about radioactive waste disposal and its high cost problem followed after multiple accidents.
For these reasons, the United States sought support from foreign nations, and Korea was one country chosen to support the United States as their relationship improved.
"This phenomenon implies how urgent the United States is in its recovery of the nuclear industry,” claimed Kim Ji-young from the Korea Atomic Energy Research Institute.
As Seoul works to strengthen its longstanding alliance with Washington, Korea is encountering a new set of opportunities in the expanding U.S. nuclear energy sector. Recent partnerships signal a broader opening for Korea to take part in the design, construction and supply chain development of SMRs.
The global SMR market is expected to grow substantially in the coming decades, supported by Korea’s 10th Electricity Plan, which targets six new reactors by 2033 and nuclear energy accounting for 34.6 percent of national electricity. Korea aims to increase nuclear generating capacity from 24.7 gigawatt-electrical in 2022 to 28.9 gigawatt electrical in 2030 and 31.7 gigawatt electrical in 2036, while also planning to export 10 nuclear units by 2030 and advance the development of Korean SMRs, according to the World Nuclear Association.
This expansion strengthens Korea’s economic position by enhancing its global role as a supplier of advanced nuclear components, supporting domestic industry growth, creating high-skilled jobs and promoting expertise in reactor construction, operation and supply chain development. Moreover, continued investment in nuclear energy contributes to national energy security and offers a low-carbon alternative that aligns with long-term environmental and climate goals.
But the benefits come with notable challenges.
Korea’s increased involvement in U.S. strategic-sector initiatives stems from a $350 billion investment package linked to the Korea-U.S. trade deal, which allocates $200 billion for U.S.-selected strategic industries, including advanced energy and nuclear technology, and $150 billion for shipbuilding cooperation, according to Reuters.
A Korean report noted, “Mid‑ to long‑term, critics warn that Korea’s nuclear ecosystem could be structurally subordinated to Westinghouse […] even for SMRs, Korea may have to submit to a U.S. firm’s technology verification.”
Some experts point out that while cooperation strengthens diplomatic ties, it may temporarily slow Korea’s ability to diversify its domestic energy innovation efforts.
Pressuring investment: In the pipeline of Trump’s ‘Alaska LNG’ project
![A model of an LNG tanker is seen in this illustration taken on May 19, 2022. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/12/07/2f2331d8-da69-4711-b300-640505c21df4.jpg)
A model of an LNG tanker is seen in this illustration taken on May 19, 2022. [REUTERS/YONHAP]
Trump’s ambitious construction of an 800-mile-long pipeline in Alaska that encompasses regions from the North Slope to the Cook Inlet — a project known as Alaska LNG — is the ultimate fruit of his plans for the advancement of U.S. power in the energy industry.
Mike Dunleavy, the Republican governor of Alaska, describes the project as a “step in the right direction for Alaska and American energy dominance,” supporting Trump’s cancellation of the 2024 Rule on Alaska Petroleum Reserve on Nov. 23.
But who will enable his vision for U.S. oil industry expansion?
Trump is turning to Asian countries for the answer, with Korea as one of the prime sources for concentrated investment.
“We have the greatest amount of energy in the world and we're dealing with South Korea, as you know, in Alaska,” Trump declared at the Korea-U.S. summit on Aug. 25. “We're going to be making a deal, a joint venture with South Korea. Japan is also very strongly involved."
Despite Trump’s confidence in Korea’s inclination to collaborate, no realistically operational discussion took place during the summit, according to chief presidential secretary Kim.
On this topic, Shin Hyun-don, a professor of the energy resources department at Inha University, concludes in hindsight that the contract between the United States and the Korea Gas Corp. (Kogas) signed in August was an effective means of circumventing seemingly compulsory Alaska investment, which can be highly risky considering its technical and economic uncertainty.
The long-term purchase contract requires Kogas to buy 3.3 million tons of U.S. LNG per year across a decade.
“The current government deserves a passing score as [the contract] created a valid justification to not participate in the Alaska LNG project,” Shin remarked.
Further regarding this settlement, optimists view this agreement in a commercially beneficial light in that while crude oil from the Middle East entails a 3 percent tariff, the agreement with the United States would be under the two nations' FTA, indicating duty-free shipments despite the relatively long distance.
“Crude oil from the United States is more economical depending on the circumstances,” an official said.
Yet, domestic industries are expressing concerns about the inevitability of a widespread reconstruction of oil facilities for the accommodation of U.S. crude oil in national factories, which would require a prodigious amount of funds — $2 billion to $3 billion worth of structure reformation to be exact, the Korea National Oil Corporation revealed.
This would be especially unfavorable considering Korea’s current economic state. The Lee government’s midterm financial plan is predicted to add up to more than 109 trillion won ($74 billion) in new debt each year, according to Park Sung-hoon, the chief spokesperson of the People Power Party.
The aftermath for the energy industry
![U.S. President Donald Trump holds an executive order announcing the U.S. withdrawal from the Paris Agreement he just signed during the inaugural parade inside Capital One Arena in Washington, D.C. on Jan. 20. [AFP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/12/07/f99d8c74-a2bf-4f1c-ab97-0bc51425e602.jpg)
U.S. President Donald Trump holds an executive order announcing the U.S. withdrawal from the Paris Agreement he just signed during the inaugural parade inside Capital One Arena in Washington, D.C. on Jan. 20. [AFP/YONHAP]
“Both leaders welcome Korean investments in various sectors to advance economic and national security interests, including but not limited to shipbuilding, energy, semiconductors, pharmaceuticals, critical minerals, and artificial intelligence/quantum computing,” said the White House after the Korea-U.S. summit, held prior to the Asia-Pacific Economic Cooperation (APEC) conference in Gyeongju, North Gyeongsang, on Oct. 29, alluding for more potential interactions between the two countries in multiple sectors of the manufacturing industry.
Trump’s endeavor to develop the energy industry in the United States became apparent on May 23 after signing four executive orders to recalibrate the U.S. nuclear industry and discussing rapid cooperation on Alaska LNG supplying East Asian countries.
The Korea Atomic Energy Research Institute claimed in July that the Trump administration's actions, such as signing executive orders on nuclear energy, are “desperate acts on rejuvenating the U.S. nuclear energy industry.”
U.S. Secretary of Energy Christopher Allen Wright also said on Sept. 25 that the construction of LNG pipelines in Alaska will be “started within the next 12 months.”
Such a rapid execution to renovate and empower an industry was reflected in affairs with Korea.
In the first summit, private companies such as Trifigura and Total Energies were contracted for future exports of LNG to Korea, and companies like Centrus and Fermi America decided to cooperate on establishing a nuclear facility complex in Texas.
There was also an agreement between two defense-wise allied nations to approve the construction of nuclear-powered submarines operated by Korea.
Further collaborations in developing nonrenewable energy sources and applications brought a warning from the Embassy of China in Korea to “ exercise caution when proceeding [with introducing nuclear submarines].”
As the summit came to a conclusion and overall investment logistics were finalized, a variety of comments came from the Korean political sphere.
Democratic Party leader Jung Chung-rae said the overall investment was “the greatest negotiation and greatest achievement that will forever shine in the history of Korean diplomacy.”
The People Power Party claimed that the execution of the conference was only made “how the Americans wanted,” expressing criticism toward the terms.
The commerce industry expressed relief at the decision to disperse investment sectors, with the Peterson Institute for International Economics rating it as a “wise decision in minimizing foreign market instability” and the New York Times reviewing it as “overall less burdensome.”
The Korean Confederation of Trade Unions criticized the Korea-U.S. summit for the decision to accept investments to facilitate energy, goods and technology and exports to the United States, saying, “The burden will ultimately fall on workers and the public.”
With the final terms made for large-scale investments, it comes down to either a revival or rehabilitation of Korea-U.S. economic affairs and projects deemed prosperous for energy production under the Trump administration. With “Lee's strategy of flattery” clearly working, the BBC said, now Korea must wait to see whether or not the trick brings a beneficial impact.
BY MOON JEONG-WON, COLIN DOH, KIM CHA-EUN, LEE SHIN-HO [[email protected], hjdoh28@kislac, [email protected], [email protected]]
with the Korea JoongAng Daily
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