Editorial: With the U.S. investment plan taking shape, South Korea must use it as leverage in security and trade talks

The shape of South Korea's massive investment in the United States is beginning to emerge. Seoul and Washington have selected a gas-fired combined-cycle power project in Encinal, Texas, as the first project. The initial funding is expected to total $2.2 billion or more this year, with a plan to be announced on the 18th and the first transfer to follow by the end of the month.

The central test, the editorial argues, must be commercial rationality: whether investors can recover their principal and returns. The investment should therefore proceed only after a strict review. Now that the investment negotiations have been concluded, South Korea should also use them as leverage in security and trade talks and take a more assertive approach to protecting its national interests.

The proposed destinations have narrowed to three: a framework to build eight nuclear reactors in the United States, valued at $120 billion; an Alaska liquefied natural gas project worth $67 billion; and the Texas gas-fired power project, valued at $22.3 billion. South Korea is also pursuing a minority stake in Westinghouse for the nuclear construction programme. The government, however, is reportedly cautious about the Alaska LNG project.

The editorial accepts energy infrastructure as a reasonable focus, citing rapidly rising U.S. power demand from artificial intelligence data centres. Texas is known for severe power shortages, but higher demand alone does not guarantee profits. Long-term power purchase agreements, construction costs and permitting delays must be examined carefully, especially in a country with high labour costs and a weak manufacturing ecosystem.

The nuclear programme deserves particular caution because it would absorb 60 percent of the $200 billion package. The editorial warns against committing the total investment before securing profitability. It calls for active promotion of Korean-designed reactors and written guarantees covering Korean companies' design, construction and operating stakes, profit sharing and responsibility for cost overruns.

It describes the Alaska LNG project as even riskier, noting that major oil companies including ExxonMobil abandoned it in the mid-2010s because of weak economics. The broader investment pledge, including $150 billion in shipbuilding cooperation, totals $350 billion, or about 470 trillion won. The editorial says that burden is excessive for South Korea's economy and foreign-exchange market, but that Seoul agreed under U.S. pressure. It warns that accepting Washington's demands without limit could leave South Korea, in President Donald Trump's phrase, as a cash machine.

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cash machine