South Korea invests in U.S. gas project; nuclear delayed

The signing of a memorandum of understanding between the United States and South Korea that would formalize the latter's $350 billion investment plan in the former was expected to come at the end of last week.

However, that plan has been delayed, reportedly because of hesitance among U.S. officials regarding the planned domestic deployment of Korea Hydro & Nuclear Power's APR1400 reactor design.

As of this writing, South Korea has committed to pursuing a gas plant in Texas, but a firm commitment on the nuclear portion of the deal remains in limbo.

The context: Last year's developments in U.S.-international trade relations and their closely related tariff wars were rapid, difficult to track, and ever-changing.

On the South Korean front, President Donald Trump threatened to raise tariffs as high as 25 percent, leading to prolonged negotiations that ultimately resulted in South Korea agreeing to invest $350 billion in the United States.

Of that investment, $150 billion was earmarked for the shipbuilding sector, and $200 billion was left open for projects that generally were "deemed to advance economic and national security interests," including energy, AI, semiconductors, pharmaceuticals, and critical minerals, per the text of an MOU signed between the two nations.

The signing of this MOU in July 2025 played a part in smoothing trade relations, with South Korea's tariff ultimately being lowered to 15 percent. In the 14 months since that signing, the final deal has been slow to move from an MOU to firm investments. In response to this slowness, in January, Trump threatened once again to raise tariffs to 25 percent. This threat was followed by the South Korean parliament approving the investment, and the tariff was not ultimately raised.

The newest development: Earlier today, South Korean outlet Yonhap News reported that in a closed-door session, the South Korean parliamentary trade committee had officially chosen to move forward on a 6.3-GW combined-cycle gas power plant in Encinal, Texas, which could help power AI data centers and semiconductor chip plants. This project is valued at $22.3 billion, and a "significant" payment from South Korea to the United States is expected by the end of September, according to the Japan Times.

The nuclear snag: This new gas investment still leaves some $178 billion of the broader investment unaccounted for. Much of that funding is tentatively planned to go toward the construction of up to eight gigawatt-scale reactors in the United States.

This plan tentatively involves the deployment of six Westinghouse AP1000s and two KHNP APR1400s. However, that general outline is complicated by numerous political and legal considerations, and, as of now, the proposed nuclear portion of the investment package remains unconfirmed.

Some metrics: The AP1000 and the APR1400 are both gigawatt-scale, LEU-fueled pressurized water reactors. They most obviously differ in size: the AP1000 has a nameplate capacity of 1,110 MWe, and the APR-1400 has a nameplate capacity of 1,400 MWe.

In terms of operational units, eight APR1400s are currently on line (four in South Korea and four in the United Arab Emirates). Meanwhile, six AP1000s are currently on line (two in the U.S. and four in China). Each design is broadly considered the flagship large reactor of its respective country (notwithstanding ownership of Westinghouse by Canadian companies Brookfield Asset Management and Cameco), and both countries are currently working to export their design internationally. Both designs hold design certifications from the Nuclear Regulatory Commission.

The question of whether an APR1400 would be deployed domestically-especially as opposed to further AP1000 units-calls to mind significant and recent tension between the involved companies. In 2022, Westinghouse sued KHNP and its parent company, Kepco, in order to prevent the export of the APR1400. That lawsuit alleged that the APR1400 includes Westinghouse intellectual property and as such requires the company's express permission prior to export.

Over the next three years, this legal battle continually evolved before being cut short by Westinghouse announcing it had reached a settlement with KHNP and Kepco to "resolve its outstanding intellectual property dispute."

While the terms of this agreement have yet to be officially divulged, some South Korean lawmakers went as far as describing it as a "slave contract" that "surrenders nuclear sovereignty to the U.S.," per the Financial Times. Terms reportedly include KHNP and Kepco paying Westinghouse $825 million in goods, services, and royalties per exported reactor over the next 50 years and restricting the companies from exporting the APR1400 to North America, Europe, and Japan.

Conversations over the deployment of the APR1400 have only been further complicated by the fact that South Korea is currently in negotiations regarding its potential purchase of a minority stake in Westinghouse.

The interplay among that potential stake, the existing agreement, and the broader trade negotiations-set against the complex backdrop of their technical, geopolitical, and economic ramifications-remains incredibly murky. As of now, the only certainty is the uncertain future when it comes to the next phase of South Korean investment in U.S. nuclear.