USSC Insights | President Trump approves Korean version of AUKUS
On Wednesday 29 October, during the Korea-US leaders’ meeting on the sidelines of the APEC Summit, a rather unexpected segue into the topic of nuclear power took the world by surprise. President Lee Jae Myung asked US President Donald Trump to “make a decision to allow us to receive fuel for nuclear-propelled submarines.” The next morning, in a series of social media posts, President Trump declared that, “I have given them approval to build a Nuclear Powered Submarine, rather than the old fashioned, and far less nimble, diesel powered Submarines that they have now.” In just a few hours, President Trump overturned the Biden administration’s position since 2021 that the transfer of naval nuclear propulsion to Australia under the AUKUS partnership was a “one-off” deal. What appears to have been a spur-of-the-moment decision by President Trump in one of his many social media posts could have far-reaching consequences for the US alliance with South Korea as well as US strategic interests throughout the Indo-Pacific.
An unexpected development
The main focus of this second meeting between President Trump and President Lee of South Korea was on trade and investment. Since their first meeting in August, the two sides had struggled to reach an agreement on the terms and conditions of a $350 billion South Korean investment pledge. At the summit, the Lee administration announced a $200 billion cash investment package, capped at $20 billion in annual investments over a decade, along with a $150 billion shipbuilding investment package known as the “Make American Shipbuilding Great Again (MASGA)” initiative. In return, the Trump administration would give a partial reduction in US tariffs on South Korean exports from 25% to 15%, though still in violation of the 2018 trade deal that President Trump had signed in his first term.
Bilateral security discussions have so far been limited. Nobody predicted an announcement on the sharing of naval nuclear propulsion technology in the lead-up to the APEC summit. Most of the security coverage this year has been about “alliance modernization,” meaning US demands for South Korea to increase its defence spending, potential troop reductions or strategic flexibility of US troops based in Korea for a Taiwan contingency, and returning wartime operational control of South Korean forces. An offer to share what the US military calls one of its “crown jewels” was certainly not on the cards.
The AUKUS analogy
The announcement has drawn obvious comparisons to the AUKUS partnership. In fact, South Korea has expressed an interest in acquiring a nuclear propulsion capability for almost 20 years. However, this has been refused by successive US administrations until now. More recently, South Korean governments have expressed interest in cooperating under Pillar Two of the AUKUS partnership. The Korean case appears similar to AUKUS in that both are not about nuclear armament but only nuclear propulsion. However, the roadmap that President Trump announced this week for South Korea would look substantially different from the AUKUS model. Whereas AUKUS involves the transfer of existing US Virginia-class attack submarines and the local construction of Australia’s future fleet of SSN-AUKUS submarines in Australian shipyards, the Korean case is being framed as a US-built enterprise with Korean investment.
The Philly shipyard angle
In a separate social media post, President Trump wrote: “South Korea will be building its Nuclear Powered Submarine in the Philadelphia Shipyards, right here in the good ol’ U.S.A.” This was a very surprising part of President Trump’s announcement. Ensuring that any investment and jobs benefit the United States seems to have been the main rationale rather than objective industrial capacity. However, the Philly Shipyard has only built commercial and naval surface ships, so transforming it into a submarine shipyard would be a very significant undertaking, as the Australian experience is proving. It is worth recalling that Hanwha Ocean only acquired the Philly Shipyard in 2024 for $100 million and has recently pledged to invest a further $5 billion into infrastructure upgrades.
Meanwhile, there are well-documented challenges facing the two existing US private submarine shipyards in Connecticut and Virginia. These shipyards already need to find 100,000 new workers this decade alone. Whether the US submarine industrial base can meet US Navy targets while helping Australia has been one of the main sticking points of AUKUS since day one. If this proposal makes any progress, there would need to be a more comprehensive assessment of where and how to find an optimal pathway, similar to the 18-month AUKUS consultation period following the 2021 announcement.
Strategic benefits and costs
From a South Korean perspective, an undersea nuclear-propulsion capability has widely been considered necessary in the face of Chinese and Russian nuclear-powered and nuclear-armed submarine presence. In addition, North Korea has also started to build its own nuclear-powered, and potentially nuclear-armed submarines. Directly facing three nuclear-armed authoritarian powers, including a North Korean regime that is building a non-strategic nuclear arsenal for nuclear coercion, South Korea needs to restore a balance of power across all military domains. The ability to deploy nuclear-powered submarines for extended periods provides additional conventional strike options that the existing fleet of diesel-electric submarines cannot, and which South Korea must otherwise rely on the United States for.
More fundamentally, the proposal has the potential to shift the broader Overton Window when it comes to what is possible in ROK-US nuclear energy cooperation. Only a decade ago, South Korea was struggling to convince the United States to grant it equal treatment for civil nuclear fuel reprocessing as other US allies such as Japan. It also struggled to receive the same kinds of extended nuclear deterrence assurances as European frontline allies in the face of more acute nuclear threats. These perceived inequalities have helped drive a growing public push for stronger nuclear deterrence options and also regaining full sovereignty over the nuclear fuel cycle. By granting South Korea nuclear propulsion technology, the Trump administration is in some ways building on the Biden administration’s decision to consult more closely with South Korea on nuclear planning.
From a US perspective, a key selling point, in addition to attracting a large Korean financial investment into the US submarine industrial base, is the potential to align South Korean military capabilities with US regional strategic interests. President Lee’s pitch notably mentioned that a South Korean SSN fleet could help the United States deter not only North Korean but also “track” Chinese submarine activities in regional waters, thereby reducing the “burden” on US forces. This is a significant departure from past progressive administrations which asked for access to nuclear propulsion primarily to deter North Korea. This shift appeals to Trump administration officials who are focused on security burden-sharing in a regional context.
Regional and diplomatic implications
The proposal could have significant implications for other US allies. Japan and other US allies will be reconsidering their undersea warfare capability investments should this proposal get off the ground. If what was a “one-off” transfer to Australia during the Biden administration is now, in fact, a viable alliance agenda, then it opens up new opportunities to collectively boost submarine construction. The Trump administration’s urgency about “restoring maritime dominance” has already torn up the playbook in some ways, such as raising the possibility of naval construction in foreign shipyards or and ordering icebreakers from Finland.
For China and North Korea, it could blunt what was emerging as their asymmetric advantage over South Korea’s military. China’s muted initial response likely reflects caution to see whether this develops into something more concrete than just a few social media posts by President Trump before properly responding. Beijing got a lot of mileage out of its disinformation campaign against AUKUS in the first few years, so they have a playbook to mischaracterise any alliance initiative. China will try to prevent the emergence of a federated submarine and shipbuilding enterprise among US allies in the Indo-Pacific at all costs given this is where it remains years behind the United States.
Non-proliferation considerations
Despite South Korea’s advanced civil nuclear sector, it remains bound by US agreements restricting military nuclear use. A sealed-reactor model similar to AUKUS would mitigate proliferation concerns by preventing South Korean handling of nuclear fuel. Ironically, rather than accelerating calls for an independent nuclear deterrent in Seoul, closer nuclear-propulsion cooperation with the United States could constrain such pathways by embedding South Korea more deeply in US and IAEA safeguards and oversight mechanisms.
Outlook
If implemented, a Korean version of AUKUS would represent a historic expansion of alliance cooperation, expression of trust, and materially strengthen deterrence in Northeast Asia. In the context of the $150 billion ROK-US MASGA initiative, this could drive serious financial and technical investment by the ROK into the US submarine industrial base in ways that Australia simply cannot. That would be a win-win for Korea, Australia and the United States. However, it is still more of an idea than a policy, and it will take many months, if not years, to develop an “optimal pathway” that has buy-in from the diverse stakeholders in both countries necessary for success, including lawmakers, defence bureaucracies, private sector suppliers, and unions.