SEOUL: Two weeks ago, Presidents Donald Trump and Lee Jae-myung shook hands and announced that months of tough negotiations over tariffs and security had finally been resolved, but despite the fanfare, no formal agreement has yet appeared on paper.
The delay seems to hinge on a sensitive request from Seoul: approval from Washington to build a nuclear-powered submarine. Lee had raised the idea publicly at a recent Asia-Pacific forum in South Korea, sparking a flurry of discussions behind closed doors.
After their meeting, both sides promised a fact sheet outlining the agreements — covering security issues, including the submarine project, as well as a trade deal first floated at their initial summit in July. Under that deal, South Korea would invest hundreds of billions of dollars into US projects in exchange for lower tariffs.
“Since the matter of building a nuclear-powered submarine has been raised, each of the US departments seems to need some time to adjust their opinions,” South Korean Defence Minister Ahn Hak-soo told KBS News on Sunday.
While Washington has approved Seoul’s use of nuclear fuel for the project, finalising the fact sheet is taking longer than expected. A senior South Korean presidential official explained on Friday that US agencies are still reviewing the proposal and negotiating the exact wording.
The situation is complicated further by mixed messages from the two leaders. Trump has suggested on social media that the submarine would be built in a U.S. shipyard, while Lee has insisted it should be constructed in South Korea. Analysts say this underscores lingering uncertainty over whether the U.S. is willing to transfer sensitive technology.
Despite the submarine dispute, both governments maintain that the trade portion of their negotiations is largely settled. However, disagreements over the structure of South Korea’s proposed US$350 billion (S$479.5 billion) investment fund have prevented a joint statement from being issued.
“When it comes to tariffs, the draft can be seen as finalised and will be made public when the joint fact sheet is ready to be announced,” a South Korean trade ministry official said.
The delay is already hitting businesses hard. Hyundai Motor, whose battery facility in Georgia faced a U.S. immigration raid in September, is reportedly losing around 300 billion won (S$298 million) each month because of the stalled tariff deal, according to Industry Minister Kim Jung-kwan.
A memorandum of understanding on South Korea’s massive investment package is ready, but it remains unsigned. Officials say they are waiting for the formal announcement before taking the next steps, including briefing the South Korean Parliament.
As Seoul and Washington continue to work out the details, both sides are eager not to let months of diplomacy unravel, but analysts warn that sensitive security issues could continue to slow progress, even as the trade deal nears completion.
