Amid ongoing efforts to deepen economic ties, South Korea and the United States continue to face significant challenges in finalizing an agreement on Seoul’s ambitious $200 billion investment in the U.S. The negotiations are complicated by disagreements involving nuclear power projects, financial schedules, and investment risk assessments.
A major sticking point is the plan to construct eight nuclear reactors in the U.S., with six proposed to use Westinghouse’s AP1000 design and two to utilize South Korea’s APR1400 technology. South Korea is considering dedicating roughly $120 billion of its investment to these nuclear initiatives. However, U.S. stakeholders, including Westinghouse, have expressed reservations about incorporating the Korean-designed APR1400 reactors, stalling progress on the nuclear package.
Further complicating matters is South Korea’s interest in acquiring a 15% to 20% stake in Westinghouse, complete with voting rights and a board seat. In contrast, Westinghouse aims to restrict South Korea’s ownership to less than 10%, highlighting a significant divergence in the negotiations.
Financial arrangements remain another contentious point. The U.S. has reportedly requested South Korea to contribute over $9 billion by year’s end, whereas Seoul had initially planned for a smaller contribution in 2026, escalating annual investments thereafter. The differing approaches to funding schedules add to the uncertainty surrounding the agreement.
The two nations also grapple with how to calculate investment returns and losses. South Korea proposes using profits from successful projects to mitigate failures, while the U.S. prefers evaluating each project independently. Under the proposed framework, the U.S. would receive 90% of net profits after the recovery of principal and interest, a structure that South Korea fears might lead to bearing losses from failed ventures alone.
Despite these hurdles, both governments are committed to resolving their differences and continuing their partnership discussions. South Korea’s Industry Ministry has emphasized that no final decisions have been made regarding the projects, funding structures, or investment arrangements, keeping the door open for further negotiation.