Editorial: Use the Emerging U.S. Investment Plan as Leverage in Security and Trade Talks

The first project in South Korea’s planned investment in the United States will be a Texas gas-fired combined-cycle power project, with this year’s funding expected to reach $2.2 billion or more. The two governments plan to announce the investment program on the 18th and make the first transfer at the end of the month.

The key test for every project should be commercial viability, particularly whether investors can recover their principal and interest. The investment targets have narrowed to three: a framework for building eight U.S. nuclear reactors worth $120 billion, an Alaska liquefied natural gas project worth $67 billion, and the Texas power project valued at $22.3 billion. South Korea is also pursuing a minority stake in Westinghouse for the nuclear construction program.

Centering the investment on energy infrastructure is understandable because artificial intelligence data centers are rapidly increasing U.S. power demand. Texas is known to face severe power shortages. But rising demand alone cannot guarantee returns. The editorial says investors must closely assess long-term power purchase agreements, construction costs and the risk of delays in permits, especially given high labor costs and a weak manufacturing ecosystem in the United States.

The nuclear portion, which would account for 60% of the $200 billion, requires particular caution. Seoul should not commit to the total investment before securing profitability, the editorial argues. It calls for active efforts to adopt Korean-designed reactors and explicit agreements covering Korean companies’ design, construction and operating stakes, profit-sharing and responsibility for cost overruns.

The Alaska LNG project carries even greater risks, the editorial says. ExxonMobil and other major oil companies withdrew in the mid-2010s because they judged the project economically unviable. Although the Trump administration is pressing ahead before the November midterm elections, Seoul has no reason to assume a project that does not make financial sense. The broader U.S. investment commitment, including $150 billion in shipbuilding cooperation, totals $350 billion, or about 470 trillion won. The editorial says that after the first project is finalized, South Korea should use the agreement to press its interests more forcefully rather than accept Washington’s demands indefinitely.

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