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The White House has officially approved a landmark agreement that will allow South Korea to build nuclear-powered submarines.
Some shit you should know before you dig in: It’s no secret that the US shipbuilding industry has fallen behind global competitors (particularly China). Over the years, China has rapidly scaled its commercial and military ship production with state-backed coordination and vast industrial capacity, while the US has struggled with bottlenecks in skilled labor, outdated shipyards, and inconsistent federal funding. In response, the US has begun making significant investments to revive domestic shipbuilding, aiming to modernize facilities, streamline procurement, and train a new generation of shipbuilders. However, rebuilding this industrial base will take years, if not decades. To bridge the gap in the interim, the US has increasingly looked abroad for technological support, industrial capacity, and co-production opportunities to help meet urgent naval demands and strengthen maritime competitiveness.
What’s going on now: South Korea and the United States unveiled a sweeping bilateral agreement that places shipbuilding at the center of a new strategic and economic partnership. As part of the deal, South Korea will invest $150 billion directly into the US shipbuilding sector, with the aim of revitalizing struggling American shipyards and accelerating the production of both commercial and military vessels. A joint shipbuilding working group will be established to coordinate projects, modernize US facilities, train workers, and expand industrial capacity. The agreement includes provisions for potential co-construction of ships in both countries, allowing South Korean shipbuilders (who dominate global ship production) to assist in fast-tracking US maritime goals. Crucially, the US has also granted South Korea the green light to build nuclear-powered submarines, marking a historic shift in defense cooperation.
Adding complexity to the arrangement, President Trump has reportedly asked South Korea not only to build submarines for its own fleet but to construct at least two nuclear-powered submarines for the US Navy as well (potentially for free). While South Korean officials have publicly denied that any such deal is in place, behind-the-scenes negotiations reportedly include discussions about producing US-class submarines, such as the Virginia-class, under a shared industrial framework.
This shipbuilding pact is just one component of a broader $350 billion economic and security deal between the two countries. In addition to the $150 billion investment in shipbuilding, South Korea will contribute $200 billion in strategic investments across US industrial sectors, including AI, clean energy, and advanced manufacturing. In return, the US will lower tariffs on South Korean exports, slashing duties on automobiles, auto parts, lumber, and pharmaceuticals to 15%, down from 25%.
