South Korea's $200 billion investment package in the US is causing disagreement

Tokyo. Donald Trump described it as “the colossal package”: The US President announced South Korea’s investment project in the USA on Wednesday in the White House. South Korea will finance a gas power plant for AI data centers in Texas and eight nuclear power plants. “And finally the liquefied natural gas pipeline in Alaska,” said Trump. “This is a big project.” The package totals around $200 billion.

But South Korea promptly objected: In Seoul's view, only the gas power plant has been agreed upon so far, with a capacity of six gigawatts, the same as six conventional nuclear reactors. But Trump appears to be interested in demonstrating another success in his tariff campaign against imports from all over the world shortly before the US Congress elections in November - a campaign that the US Supreme Court has largely declared illegal.

After negotiations, the framework for the investments is now in place. As with Japan, which even pledged $550 billion, even the Supreme Court's ruling did not stop the implementation of the promises. Because both countries see themselves under pressure from Trump not only economically, but also in terms of security policy.

Unlike the European NATO states, the East Asian neighbors have one primary ally when it comes to security policy: the USA. That's why they're obviously willing to go to great lengths to keep their alliances attractive to Trump. They seem to be positioning themselves as irreplaceable partners, supporting Trump's reindustrialization strategy with lots of money and technology.

That obviously resonates with Trump. The package marks “an important step” toward securing the energy supply chain and American energy dominance, he said. It also strengthens the partnership with South Korea and the Pacific region more than ever.

According to him, the gas power plant in Texas will cost $22 billion. The developers are Related Companies and the energy supplier NextEra Energy. The first phase is scheduled to begin commercial operation in 2029 and the entire facility is scheduled to be completed in 2032.

The US power plant manufacturer Westinghouse Electric and South Korea's energy supplier Korea Electric Power (Kepco), which is majority state-owned, and its subsidiary Korea Hydro & Nuclear Power (KHNP) are planning together. The two Korean companies are also expected to take a minority stake in Westinghouse.

The most controversial is a gas pipeline in Alaska that is around 1,300 kilometers long and may cost $50 billion. South Korea's Industry Minister Kim Jung-kwan described it as economically "highly risky" last year. Nothing has changed in this assessment: despite Trump's announcement, a joint statement said that implementation depends on "economic viability".

The problem: The pipeline is intended to connect the gas deposits in the difficult-to-access north of Alaska with liquefaction and port facilities in the south. But the project already has competition in the region - of all places in Canada, which sees itself threatened by Trump.

On September 29, the energy company Shell, the Japanese trading company Mitsubishi and other partners announced that they would double the liquefied natural gas production of their Canadian joint venture LNG Canada. They want to invest $14 billion for this. The advantage of this project: The pipeline to the Canadian west coast already exists, and the plant has been supplying liquefied natural gas to Asia since 2025. By the beginning of the 2030s, 28 million tons will be mined per year. This makes it one of the largest projects in the world.