U.S.-South Korea Tariff and Security Deal Faces Delays Over Nuclear Submarine Dispute

Two weeks after U.S. President Donald Trump and South Korean President Lee Jae Myung announced progress on resolving long-standing disputes over tariffs and security cooperation, no official agreement has been released. South Korean officials say the delay is largely due to ongoing talks about Seoul’s request to develop a nuclear-powered submarine with Washington’s approval.

During their recent meeting on the sidelines of an Asia-Pacific forum in South Korea, Lee publicly raised the issue, highlighting Seoul’s ambition to strengthen maritime defense capabilities. Officials had promised a detailed factsheet outlining both the trade and security components, including the submarine deal, but its release has been repeatedly postponed.

South Korean Defense Minister Ahn confirmed that multiple U.S. departments are still reviewing the language of the agreement and making adjustments. While Washington has granted Seoul permission to use nuclear fuel for submarine development, concerns remain about the potential transfer of sensitive U.S. military technology. Trump previously claimed on social media that the submarine would be built in a U.S. shipyard, contradicting Lee’s position that it would be domestically constructed.

The uncertainty has impacted financial markets, with the Korean won weakening by 0.7% to a seven-month low of 1,467.5 per dollar on Tuesday. Industry Minister Kim Jung-kwan said that Hyundai Motor is losing about 300 billion won ($211 million) monthly due to the delayed tariff agreement, which has disrupted exports to the U.S.

Officials say the memorandum of understanding on South Korea’s $350 billion investment package in U.S. projects is ready but awaits final approval and signing. The trade ministry confirmed that negotiations are in their final stages, but an official announcement will only follow once all departments align on the factsheet’s language.