South Korea’s government has announced that it has finalised an agreement to build nuclear-powered submarines in partnership with the United States.

The US has approved the “attack submarines” and agreed to cooperate in sourcing fuel, according to a fact sheet released by the White House on Thursday.

The agreement marks a significant step in South Korea’s relations with the US and comes amid a period of growing tensions on the Korean Peninsula: with the nuclear-armed North Korea, and an expansionist China to the west.

Here’s what you need to know about the agreement.

The agreement between the US and South Korea comes as leaders from both countries reached a broad trade deal earlier last month that would see reciprocal tariffs cut to 15% from 25%.

US President Donald Trump had slapped a tariff rate on Seoul of 25% earlier this year – which his counterpart Lee Jae Myung managed to negotiate down to 15%, after Seoul said it would invest $350bn (£265bn) in the US, including $200bn in cash investment and $150bn in shipbuilding.

In a White House readout released on Thursday, the US said it had “given approval for the Republic of Korea to build nuclear-powered attack submarines… [and would] work closely to advance requirements for this project, including avenues to source fuel”.

In an earlier post on his social media platform Truth Social, Trump had said the vessels would be constructed at a shipyard in Philadelphia run by South Korean conglomerate Hanwha.

Only six countries currently possess nuclear-powered strategic submarines: the US, China, Russia, the UK, France and India.

South Korea already possesses about 20 submarines, but they are all diesel propelled and therefore need to surface far more frequently. Nuclear submarines are also able to operate further and faster.

“I have given them approval to build a nuclear-powered submarine, rather than the old-fashioned, and far less nimble, diesel-powered submarines that they have now,” Trump had wrote on Truth Social.

South Korea is a powerhouse when it comes to civilian nuclear energy. It had a nuclear weapons programme in the 1970s but gave it up following US pressure.

And so its ability to enrich or reprocess uranium is limited by the US as it is entirely dependent on imports.

The latest vessel programme is aimed at countering North Korea, which recently revealed that it was pursuing its own nuclear submarine programme.

President Lee had told Trump at the APEC summit last month that South Korea needed them for that express purpose.

In a TV interview last week, Ahn Gyu-back, South Korea’s Minister of Defence, said that nuclear submarines would be a “proud achievement” for South Korea, and a major leap in strengthening the country’s defence against the North.

The stealth of nuclear submarines would keep North Korean leader Kim Jong Un “awake at night”, he added.

North Korea has also been pursuing a nuclear submarine programme – possibly with Russia’s help, according to South Korean officials.

In March 2025, North Korea unveiled pictures of what it claimed was a nuclear-powered submarine that was under construction, showing Kim visiting the shipyard.

Pyongyang is expected to have the submarines within the next few years.

North Korea is also estimated to have an arsenal of approximately 50 nuclear weapons, as part of its broader nuclear weapons programme.

Jo Bee-yun, a research fellow at the Sejong Institute, suggested that Seoul’s acquisition of nuclear submarines will help it stay apace in East Asia’s escalating arms race.

“North Korea’s nuclear weapon is an established fact,” she told the BBC. “[South Korea acquiring] nuclear submarines is only a step in the larger trend of rising tension.”

It is unclear how much the nuclear-propelled submarines will contribute to South Korea’s defence capabilities – and though they are very expensive, they don’t quite change the balance of power on the Korean Peninsula, according to some experts.

Yang Uk, a research fellow at the Asan Institute for Policy Studies, told the BBC that the nuclear subs’ primary purpose is to assure South Korean voters that their government is responding to North Korea’s nuclear threat.

“South Korea cannot develop its own nuclear weapons to counter North Korea’s,” Dr Yang said. “What’s something that they can do? Fielding nuclear submarines.”

Dr Yang believes North Korea might revel in the change, however, because it reinforces their justification to hold on to nuclear weapons – meaning it will become more difficult to demand that Pyongyang give up its nuclear arsenal.

Jo nonetheless emphasised the strategic advantage that South Korea stands to gain from the new submarine deal, describing it as a “major change” which “means South Korea is now a regional player”.

“The best feature of a nuclear submarine is its speed,” she said. “It can now go fast and far and South Korea can operate together with more countries.”

For Washington, support for South Korea’s nuclear-powered submarine programme likely aims to put pressure on both North Korea and China.

“Trump has put the burden of defence spending on the back of South Korea,” Dr Yang explained. “South Korea will greatly expand its defence budget. They will act as America’s proxy in putting pressure on China and North Korea.”

US and China have long competed for strategic influence in South Korea, leaving Seoul to walk a geopolitical tightrope. More recently, China has been increasing its naval activity near South Korea’s maritime border – a move akin to those seen in the South China Sea.

Beijing must be “furious” about South Korea’s nuclear submarine agreement with the US, Dr Yang said.

Following the deal’s announcement, the Chinese Ambassador to South Korea, Dai Bing, said he hoped South Korea would “deal with this issue prudently, taking into consideration the concerns of all sides”.

Dai also added that Beijing was engaging with Seoul on the matter through diplomatic channels, and emphasised that “the (security) situation on the Korean Peninsula and in the region is still complex and sensitive”.

Although President Trump said the submarines would be built in Philadelphia and bring jobs to the US, South Korean officials have maintained they must be built locally, where existing facilities can deliver them in a much shorter timeline.

South Korea’s Prime Minister Kim Min-seok had himself said during a parliamentary hearing that the South Korean owned shipyard in Philadelphia did “not have the capability” to build such vessels, according to reports.

Hanwha, who owns the shipyard, has yet to comment on the matter.

But now that an agreement has been reached, the next step is to adjust the nuclear agreement between the two countries, allowing for the US to provide nuclear fuel and to set the fence for its military use.