South Korea

“트럼프, 우라늄 농축 동업 제안”…이 대통령이 밝힌 한미정상회담 뒷이야기

Maekyung | Local Language | News | Dec. 5, 2025 | Geopolitical Conflict and Disputes

President Lee Jae-myung revealed that during the Korea-US summit in Gyeongju last October, former US President Donald Trump proposed a joint uranium enrichment venture with South Korea, premised on Korea producing its own enriched uranium. Trump suggested a 50-50 investment and profit-sharing arrangement. Lee entrusted the matter to US Secretary of Commerce Howard Lutnick. The joint fact sheet from the summit indicated agreement on South Korea’s civilian uranium enrichment and reprocessing for peaceful purposes, signaling possible concrete cooperation. However, practical discussions have not yet begun, partly due to US concerns over potential South Korean nuclear armament ambitions.

The proposed joint venture likely involves establishing a multilateral uranium enrichment facility jointly operated and invested in by South Korea and the US. Experts note that such a project would ensure nuclear non-proliferation, an important consideration given recent global uranium supply disruptions like the Russia-Ukraine war. Lee clarified that uranium enrichment and fuel reprocessing, as civilian activities, do not directly violate the Nuclear Non-Proliferation Treaty (NPT). He also addressed South Korea’s efforts to introduce nuclear-powered submarines, highlighting that while these are military assets, they contain no nuclear weapons or detonators and thus do not conflict with non-proliferation rules. He emphasized the strategic and economic benefits of domestic production.

Additionally, President Lee expressed a willingness to apologize to North Korea over the previous administration's distribution of leaflets that raised inter-Korean tensions but hesitated due to political sensitivities. On diplomacy, Lee indicated plans to discuss security cooperation with China alongside cultural and economic exchanges, aiming for a summit with President Xi Jinping early next year. On Japan, he reiterated a "two-track diplomacy" approach, separating historical disputes such as the Sado mine and Dokdo from ongoing economic, security, and cultural cooperation.

Joongang Ilbo | English | News | Dec. 5, 2025 | North Korea

South Korean Foreign Minister Cho Hyun emphasized the importance of pursuing diplomacy with North Korea alongside joint deterrence efforts by South Korea and the United States amid growing threats from the North Korean regime. Speaking via video at a Washington-based forum, Cho highlighted a recently released joint fact sheet on security and trade agreements between Seoul and Washington, calling it a pathway toward a "future-oriented, comprehensive strategic" alliance.

The fact sheet outlines deterrence measures including U.S. support for South Korea's acquisition of nuclear-propelled, conventionally-armed submarines and Seoul's commitment to increase defense spending to 3.5 percent of GDP. Cho stressed that deterrence must be paired with diplomacy to prevent inadvertent conflict, de-escalate tensions, and restore dialogue with Pyongyang, even as North Korea's dependence on Russia has grown, complicating prospects for renewed talks.

Cho described the South Korea-U.S. alliance as "ironclad," centered on peace and stability, and underscored a pragmatic diplomatic approach under President Lee Jae Myung. He highlighted the importance of trilateral cooperation with Japan and advancing ties with China despite recent regional tensions, pointing to a rapidly changing strategic landscape shaped by Russia, China, and Japan's evolving roles.

Additionally, Cho addressed the "alliance modernization" involving enhanced strategic economic and technological cooperation, facilitated by a newly finalized bilateral trade and investment agreement. He noted this would boost U.S. manufacturing and create new opportunities for Korean firms in sectors including shipbuilding, energy, biotechnology, artificial intelligence, and quantum technology. The U.S. also backs South Korea's peaceful development of uranium enrichment and spent nuclear fuel reprocessing capabilities, as well as Seoul's push for nuclear-propelled submarines, to strengthen shared capabilities in energy, defense, and shipbuilding.

Joongang Ilbo | English | News | Dec. 5, 2025 | UndeterminedEconomic Growth

South Korea is experiencing an economic slowdown that necessitates expansionary fiscal policies, but faces challenges due to a market saturated with record levels of liquidity. The country’s broad money supply (M2) reached 4.4 quadrillion won ($2.9 trillion) in September 2025, marking the largest amount on record with an 8.5 percent year-on-year increase. This liquidity surge is attributed to extra budgets during the COVID-19 pandemic, expansionary fiscal policies under the Lee Jae Myung administration, increased investment and lending, heavy stock market inflows, and a record current account surplus.

The excess liquidity has contributed to inflation risks, depreciation of the won, and a widening gap between policy rates and market rates. The won-dollar exchange rate recently approached 1,470 won per dollar and threatens to surpass 1,500 won, driven in part by increased foreign stock investments and capital shifts abroad due to tighter domestic real estate regulations. Inflationary pressures are also rising, with the expanded money supply impacting housing prices more sharply and quickly than broader inflation. Economists caution that liquidity growth complicates policymaking as its future allocation remains uncertain.

Monetary policy tools are limited in scope; the Bank of Korea cut base rates from 3.0 percent to 2.5 percent in 2025, but yields on 10-year government bonds rose, creating a disconnect between policy rates and market rates. The government’s large planned bond issuance next year further complicates the situation. Fiscal policy thus remains the primary instrument, but experts urge a focus on medium- and long-term structural reforms to address issues such as demographic change, low birthrates, and declining potential growth, to restore confidence in the won and manage inflation effectively.

Both the Bank of Korea governor and senior government officials downplay concerns that recent liquidity growth stems from current fiscal expansions, attributing it primarily to accumulated past liquidity. Additionally, part of Korea’s reported M2 growth includes investment funds like ETFs, which inflate comparative figures. Despite these reassurances, underlying economic vulnerabilities and policy challenges persist as the government navigates a high liquidity environment while attempting to stimulate growth.