COVER STORY Iran war hinders multiple Korea-US projects
Summary
U.S. pressure over Korea’s possible role in the Iran war is complicating Seoul’s pending talks with Washington, including a $350 billion investment commitment and nuclear-powered submarine discussions. President Lee Jae Myung said nothing has been decided on troop deployment, while Washington has said it is still waiting for Korea to commit resources. Separate pressure is also building over semiconductor tariffs and chip plant investment in the U.S.
Key Facts
- The U.S. and Korea set up the Korea-U.S. Strategic Investment Corp. in June to oversee the $350 billion investment commitment, but the first project has not been announced yet.
- A gas-fired combined-cycle power plant project in Encinal, Texas, has been mentioned as a potential first project under the investment commitment.
- Talks on Korea developing its own nuclear-powered submarine have stalled, even though Trump signaled approval last November for Seoul to pursue a nuclear sub and civilian uranium enrichment and spent fuel reprocessing for peaceful purposes.
- The Trump administration has urged Korean semiconductor companies to build manufacturing facilities in the U.S. to avoid tariffs, and Commerce Secretary Howard Lutnick hinted at a targeted and thoughtful tariff policy for semiconductors.
Military issue intertwines with security, diplomacy, trade negotiations
Civic groups hold a press conference in front of Cheong Wa Dae in Seoul, Monday, to protest the possible deployment of Korean troops to the Strait of Hormuz. Yonhap
Korea is facing an increasingly complicated task as it seeks to address a series of pending issues with the United States, as U.S. pressure for it to participate in the Iran war intertwines security and diplomatic challenges with economic and trade interests.
While participating in the war in any form is not an easy decision for Korea to make, the growing pressure is effectively preventing progress in other major bilateral issues, including Korea's $350 billion investment commitment in the U.S. and its pursuit of domestically developed nuclear-powered submarines.
U.S. President Donald Trump has repeatedly expressed frustration over Korea's reluctance to provide military support for the U.S. war on Iran. In a Fox News interview late last month he claimed that Seoul had turned down his request for help in the war and warned that he would "remember that."
Voice of America reported on Saturday that a White House official said that the U.S. was “still waiting for Korea to commit resources” to the region.
Seoul had been cautious about any potential participation, given its ties with Iran and the risks of escalating the conflict. However, as pressure from Washington intensified, Seoul hinted at possible deployment, with an official saying Friday that the government is considering a "substantive contribution" — which could include a military role, with combat, noncombat and search operations among the range of possibilities.
The shift follows not only direct pressure from Trump and other American officials but also the fact that the issue is increasingly linked to other pending bilateral matters, including economic ones.
President Lee Jae Myung underscored the sensitivity of the decision.
"It is difficult to talk about troop deployment at this point. Nothing has been decided," he said Friday. "We are watching seriously." He asked that the possibility not be discussed publicly because it is militarily sensitive.
As the situation continues, discussions for multiple projects being pursued jointly by the two countries have stalled.
This includes the first project to be carried out under Korea’s $350 billion investment commitment to the U.S. The two nations set up the Korea-U.S. Strategic Investment Corp. in June to oversee the investment, but the first project has not been announced yet. While a gas-fired combined-cycle power plant project in Encinal, Texas, has been mentioned as a potential first project, Korea’s industry ministry only said it would make a statement soon, probably this month.
Talks about Korea developing its own nuclear-powered submarine have also stalled. Last November, Trump signaled his approval for Seoul to develop a nuclear sub and pursue civilian uranium enrichment and spent fuel reprocessing for peaceful purposes, but dialogue has not been making expected progress.
The Trump administration has urged Korean semiconductor companies to build manufacturing facilities in the U.S. if they want to avoid tariffs, signaling a separate tariff for chips. Commerce Secretary Howard Lutnick hinted at a "targeted" and "thoughtful" tariff policy for semiconductors.
"Korea is caught between two difficult choices, because rejecting the U.S. request for support in the Strait of Hormuz could create friction with Washington at a time when Seoul needs U.S. cooperation on several key negotiations, while sending military assets could draw Korea deeper into the conflict with Iran," a researcher at a security think tank said on condition of anonymity.
“The bigger challenge is that under Trump, a disagreement in one area could easily affect negotiations in others,” he said.
Heo Yoon, a professor of international trade at Sogang University, said U.S. pressure reflects Washington's perception that Korea has benefited from its efforts to contain China and restructure global supply chains, as bilateral investment negotiations increasingly encompass not only industrial and trade matters but also diplomatic and security issues.
"That is why the U.S. is putting pressure on Korea in various areas, including the construction of chip plants and shipbuilding," Heo said.
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