It looks like the United States has changed Australia’s mind. In April, the Australians doubted private shipbuilder Austal could be sold to South Korea’s Hanwha Ocean, but now they have no concerns.

The most likely explanation is that Australia at first worried about what the US would think but found that the Americans thought it was not a bad idea.

The main consideration on the Austal side was US regulation related to the sensitivity of the company’s operations. As Austal owns Austal USA, which builds ships for the US Navy and Coast Guard, Hanwha Ocean’s acquisition of Austal would need approvals from major US government bodies, including the Committee on Foreign Investment and the Defense Counterintelligence and Security Agency.

While Hanwha Ocean argued that the acquisition would benefit many stakeholders, Austal said on 2 April it was ‘not satisfied that these mandatory approvals would be secured’.

But on 1 May, Defence Minister Richard Marles said: ‘Ultimately, this is a matter for Austal. They are a private company.’

‘From the government’s perspective, we don’t have any concern about Hanwha moving in this direction.’

There was no hint of hesitation that might reflect reservations in Washington.

So what happened? Quite likely, Washington told Canberra that, actually, it would be quite satisfied in working with Hanwha Ocean through Austal.

About a month before Hanwha Ocean announced its bid for Austal, US Secretary of the Navy Carlos Del Toro visited South Korea. His trip included Hanwha Ocean shipyards. He expressed interest in further cooperation in maintenance of US warships in these shipyards. Moreover, he even invited Dong Kwan Kim, a vice chair of Hanwha Group, to the US to further discuss maintenance cooperation. Later, Del Toro told the Navy League’s annual Sea-Air-Space conference that he was ‘floored’ by South Korea’s shipbuilding industry.

The US would like to ‘attract the most advanced shipbuilders in the world to open US-owned subsidiaries … here in the US’, he said, interest in inviting Hanwha Ocean to do so. If that’s his attitude, the US regulations that have concerned Austal cannot be a significant problem. The US is not concerned with using South Korean shipbuilders.

US admiration for the low costs of the South Korean naval builders and its willingness to work with them may not be the main reason behind Washington’s apparent comfort with Hanwha Ocean’s bid. A larger factor may be its desire to see its Pacific allies, notably Japan, South Korea and Australia, develop security relationships with each other. The Biden administration has repeatedly encouraged multilateral security cooperation beyond the conventional hub-and-spoke arrangement in which several Western Pacific countries are allies with the United States but not with each other. It has been particularly active in pushing its allies to work together in maritime security.

Moreover, it is particularly aiming to enhance the relationship between Japan and South Korea, as was evident at the Camp David Summit of the three countries in 2023. They made a joint statement expressing mutual commitment to regional security challenges. It was the first time that the trilateral summit had directly addressed the Taiwan and South China Sea issues together.

Since then, South Korea and Japan have increased maritime cooperation in the breadth and frequency of exercises. Australia and Japan, meanwhile, have been stepping up defence cooperation.

Hanwha Ocean buying Austal would further South Korean and Australian cooperation. The two countries mutual interests in 2+2 meeting on 1 May and have recognised South Korea’s potential contribution to AUKUS Pillar 2, the part of the Australian-British-US security partnership focused on technology other than nuclear submarines.

Ownership by Austal by Hanwha Ocean, one of three main shipbuilders for the Republic of Korea Navy, would increase the chance of Australia choosing the South Korean Daegu class for a program to build 11 general-purpose frigates as replacements for the current Anzac class. Three other foreign designs are also contenders. The Daegu design, of 3600 tonnes displacement at full load, was developed by DSME, which has become the core of Hanwha Ocean.

Whichever designer is chosen, the first three frigates of the new Australian class will be built abroad.

If Hanwha Ocean can buy Austal, it could offer corporate integration of the foreign and local side of the design and construction effort and, implicitly, smoother management.

In December 2021 the then president of the Republic of Korea, Moon Jae-in, made a largely unexpected working visit to Australia, at the end of his term, and at unusually short notice. Media speculation was that the visit was all about China, given that both Australia and Korea had been subjected by China to costly economic coercion measures, and China’s aggressive actions continued to provoke concern in both countries.

The speculation was partially right, the visit was about China. But in fact it was about South Korea’s deep concern at the stranglehold China had on the production and refining of critical minerals, and an intent to build a closer reliable supply of them from Australia. Korea is poor in mineral and energy resources and has few reserves of critical minerals, but as a major global producer of batteries, semiconductors and EVs it has a compelling need for reliable supplies of them to fuel its industry.

Korea’s geostrategic situation feeds a sense of strategic and economic insecurity—it is close to an assertive China prepared to demonstrate displeasure by imposing costly economic coercion measures, while the ever-present threat from North Korea drives the south’s priorities for military resilience, including a hi-tech military industry. As well, Covid-19 and Russia’s war in Ukraine disrupted markets and associated supply chains, further elevating Korean perceptions of risk. The Trump administration’s ‘America first’ policies had already undermined global free trade commitments and confidence in the US-Korea alliance.

Underlying Korea’s policies is a compelling need to reduce these vulnerabilities, both strategic and economic, to build resilience and to position itself as a leader in advanced technologies. Korea is now an economic giant, heavily dependent on advanced manufacturing and exports for its continued economic prosperity and future growth, but one heavily exposed to international disruption. It is also focussed on the need domestically to transition away from its heavy dependence on imported fossil fuels, not least to meet international climate commitments to decarbonise, but to transform industry to a post-smokestack clean energy economy. Korea is committed to carbon neutrality by 2050.

Big business in Korea—the ubiquitous chaebol conglomerates—initially arose from government intervention and support in the 1950s and 1960s. While they are now key components of a massive private sector, they still work closely with government and look to government for policies supportive of their (and, interchangeably, Korean) interests. Korean governments have been responsive to chaebol pressures and priorities, notably in resource diplomacy. Hence Moon’s 2021 visit to Australia.

Samsung SDI, SK Innovation and LG Energy Solution, in particular, are totally dependent on critical mineral imports for production of batteries, while Samsung and SK Hynix need specialised critical minerals for semiconductor manufacture. Steelmaker Posco and LG Chem aspire to be major producers of battery-grade raw materials. Korea is the world’s second largest manufacturer of semiconductors and holds about 26% of the global EV battery market, but it is 95% dependent on imports for its processed critical minerals supply and over 80% of this supply comes from China.

The outcome is that Korea’s government has developed a series of policies to reduce dependence on a single supplier through an activist resource diplomacy, while also being prepared to offer industry support. In February 2023, Korea’s Ministry of Trade, Industry and Economy (MOTIE) issued a list of 33 critical minerals eligible for policy support, with 10 of these considered highest priority. Stockpiles are to be increased from 54 days to 100 days of anticipated demand. Korean investment in overseas exploration and development projects will be supported through access to loans, guarantees, insurance and tax credits, lessening the risks involved for Korean investors.

Korea’s critical minerals policies, alongside chaebol searches for opportunities, have already led to significant investment in Australia. Major steelmaker Posco has invested in lithium producer Pilbara Minerals (and has a joint venture with Pilbara to produce lithium hydroxide in Korea), taken a 30% stake in Ravensthorpe Nickel and cobalt in WA, and invested in graphite producer Black Rock Mining, amongst others. LG Chem has a 7.5% stake in Queensland Pacific Minerals (QPM), mining nickel and cobalt. And Australian rare earths miner Australian Strategic Minerals (ASM) produces neodymium and other rare earths in Korea, sourced from its mine in Dubbo.

Despite some lingering concerns about Australia’s energy export policies, shared with Japan, Korea overall sees Australia as a reliable and stable long-term partner and well-endowed in the minerals it seeks, with a highly skilled exploration and mining industry.  Posco is the single largest private customer for Australian exports, valued at over $7 billion annually—and is a respected long-term investor with a relationship over more than 50 years with Australia. But as the global economy transforms, other Korean chaebol are accelerating their procurement and investment portfolios and Australia stands to benefit.

The Australia-Korea Business Council (AKBC) has a specialist sub-committee on critical minerals, intended to promote cooperation between Australian and Korean companies on their exploitation and trade. It led a delegation of hydrogen and critical minerals producers to Korea in 2022 and has produced a report Critical Minerals, Urgent opportunities which can be ordered from the AKBC website.

It has long been a concern that North Korea’s nuclear posturing would goad or frighten its neighbours into developing their own nuclear capability. Now South Korea’s president, Yoon Suk-yeol, has raised the prospect of Seoul acquiring its own nuclear weapons. Yoon stated last month: ‘It’s possible that the problem gets worse and our country will introduce tactical nuclear weapons or build them on our own. If that’s the case, we can have our own nuclear weapons pretty quickly, given our scientific and technological capabilities.’

At the same time, Yoon emphasised opportunities for nuclear sharing with the United States, stating: ‘Currently, there is a discussion between South Korea and the United States in which we share information, participate together, jointly plan, and jointly execute the operation of these US nuclear assets’.

His office quickly clarified that South Korea’s priority was to strengthen extended deterrence security guarantees to deter any threat from North Korea, a position that Yoon later confirmed. ‘I can assure you,’ he said, ‘that the Republic of Korea’s realistic and rational option is to fully respect the [nuclear non-proliferation] regime … I’m fully confident about the US’s extended deterrence.’

However, the door is now open to the possibility of South Korea developing nuclear weapons.

The threat from North Korea is front and centre in driving Seoul down this path. Pyongyang is seeking to rapidly develop tactical nuclear weapons that can be used to threaten South Korea directly. Seoul can’t ignore that growing threat. A seventh North Korean nuclear test remains likely and Pyongyang continues to develop ballistic missiles that can deliver tactical and strategic nuclear weapons. North Korean leader Kim Jong-un has called for ‘exponential’ expansion of his country’s nuclear capabilities.

That threat is emerging against a background of Russian nuclear threats against NATO, which many believe undermine traditional norms that de-emphasise nuclear weapons. The effects of Russia’s attempts at coercion on the resilience of US extended nuclear deterrence guarantees are no doubt being watched closely by Beijing, Pyongyang and perhaps even Tehran.

ASPI senior fellow Rod Lyon has highlighted uncertainties about how US extended nuclear deterrence guarantees are applied, and there are concerns in Seoul and Tokyo about the resilience of those guarantees in the face of threats from Moscow, and the prospect of such coercion by China in a future crisis over Taiwan. South Korea’s government is in effect asking whether the US will be prepared to risk trading Seattle or San Francisco for Seoul or Busan.

There’s no indication that diplomacy between the two Koreas, or between the US and North Korea, will offer a path to comprehensive and verifiable denuclearisation of North Korea.

Added to this is the potential for a return of Donald Trump as US president after 2024, which must resuscitate concerns in Seoul over whether Washington would continue to support the alliance even in the face of a growing nuclear threat from Pyongyang. A return to the ‘photo-op diplomacy’ that characterised discussions between Trump and Kim would again lead nowhere, or worse, result in the US making strategic concessions for little in return beyond empty ‘America first’ boasts to the media.

Yoon would also be paying attention to domestic political factors. Polling suggests that up to 70% of South Koreans support developing an independent nuclear deterrent. Yoon can’t ignore such widespread support, especially as the threat grows from the North. Another North Korean nuclear test could quickly force his hand.

So, what happens if South Korea takes the plunge and acquires its own nuclear forces?

To get the bomb, Seoul would have to leave the Nuclear Non-Proliferation Tray, dramatically weakening it. North Korea left the NPT in 2003 to pursue nuclear weapons, but for a liberal democracy to follow suit would be a heavy blow to the treaty’s perceived role as the inviolable centerpiece of nuclear non-proliferation. Might Tehran then seize its own opportunity, and would other states follow suit? After all, if Russia were to demonstrate the effectiveness of nuclear threats and North Korea acquired many tactical nuclear weapons without cost, that would reinforce the legitimacy of nuclear weapons in the eyes of some actors. How many states walking away from the NPT would deal it a death blow?

For South Korea to acquire an independent nuclear deterrent would damage its relationship with the US, and with its neighbours, even if uncertainty over Washington’s extended nuclear deterrence commitments was a factor in Seoul’s decision-making. China would certainly demand some form of sanctions on Seoul, and politically it would be difficult for the US to avoid imposing any costs without its own credibility being undermined.

South Korea’s neighbours would have to respond. Japan has the technological skills to develop nuclear weapons relatively quickly, though constitutional constraints could slow the process. But Tokyo has been steadily moving away from the tight limits on its development of military capabilities, and the ruling parties’ recent decision to develop a counterstrike capability based around land-attack cruise missiles has opened up a political window if Japan’s strategic environment deteriorates sharply. A breakdown in confidence in US extended deterrence would place immense pressure on Tokyo to act, especially if South Korea had taken that first step.

If South Korea and Japan were to both get nuclear weapons, it’s very likely that China would more accelerate the build-up of its own nuclear capabilities, perhaps moving faster towards its goal of 1,500 warheads by 2035 described in the Pentagon’s most recent China Military Power report. Might China move away from its ‘no first use’ policy? There’s also the question of tactical nuclear weapons for the Chinese military. The Pentagon report notes that China’s military commentators said in 2021 that precise small-yield nuclear weapons could be used for warning and deterrence, and suggested that they could lower the cost of war.

The emergence of South Korea, and potentially Japan, as nuclear-weapon states could encourage Beijing along that road.

Clearly a better option is to strengthen US extended nuclear deterrence by bringing Seoul into enhanced nuclear sharing arrangements, though those arrangements would need to be carefully defined. A nuclear sharing arrangement needn’t imply that South Korea would have operational control over US nuclear forces, which would make it significantly different to NATO’s nuclear sharing approach. For example, it’s unlikely that US tactical nuclear weapons based in South Korea would be carried on South Korean military aircraft.

Likewise, Japan, and other key Indo-Pacific partners such as Australia, need to play a role—perhaps in an Asian nuclear planning group similar to that in NATO, as researcher Jennifer Ahan suggested last year. An Indo-Pacific nuclear planning group would enhance collective decision-making over nuclear weapons and strengthen US extended nuclear deterrence guarantees.

Such steps could avoid an unconstrained proliferation cascade sweeping across Asia that would be highly destabilising and could lead to the collapse of nuclear non-proliferation norms.

Sixty-nine years ago, an armistice ended three years of fighting involving the United States, China, South Korea and North Korea. In a speech marking the anniversary, North Korea’s supreme leader, Kim Jong-un, threatened to use nuclear weapons and said his country was ‘fully ready for any military confrontation’ with the US and South Korea. That followed an April speech in which Kim implied that he’d consider pre-emptively using nuclear weapons, and his test of an intercontinental ballistic missile—probably a Hwasong 15—on 24 March. Most significantly, North Korea looks set to undertake its seventh nuclear test in coming weeks, which could coincide with joint South Korea – US military exercises on the peninsula.

North Korea is also developing short-range, or tactical, nuclear weapons. Deploying them would lower the nuclear threshold on the peninsula and give Pyongyang the option of threatening first use to coerce its neighbour to make concessions. This is often referred to as ‘escalate to de-escalate’, particularly in discussions about how Russia might use tactical nuclear weapons in its war on Ukraine.

Nuclear policy expert Ankit Panda argues that while North Korea may be acquiring tactical nuclear weapons for deterrence, they also could be used coercively to support brinkmanship and adventurism.

‘These North Korean developments have invited well-placed concern in South Korea and the United States that Pyongyang may explore the benefits of nuclear brinkmanship in future crises,’ Panda says. He notes that the alliance could be paralysed without credible retaliatory options should tactical nuclear weapons be fielded by North Korea.

In one scenario, instability in the north—perhaps brought on by a leadership struggle or economic collapse—could prompt Kim’s regime to generate a crisis near the demilitarised zone. Pyongyang could threaten to use tactical nuclear weapons to force Seoul to accept its demands, gambling that US extended nuclear deterrence would be neutralised by North Korea’s strategic nuclear forces. North Korea’s tactical nukes would become its sword and its strategic nukes the shield. Coercion and deterrence would be employed to maximum effect.

Would Washington risk a nuclear attack to defend a key ally under nuclear threat, or, as is often asked, would Washington be willing to trade Los Angeles for Seoul? If not, then extended nuclear deterrence falls apart, and US allies such as South Korea and Japan would likely seek their own nuclear deterrent capabilities against a North Korean nuclear threat or an aggressive China. Such a development could lead to a catastrophic broader collapse of nuclear non-proliferation as security dilemmas intensify. Non-nuclear states might respond by acquiring their own nuclear deterrents and nuclear states might decide to alter their nuclear force postures or expand their capabilities.

US and South Korean efforts to denuclearise North Korea seem unlikely to succeed, and there seems little that Seoul or Washington can do to dissuade Kim from further nuclear expansion, including deploying tactical nuclear weapons. The North Koreans have tested delivery systems that can carry low-yield tactical nuclear warheads and may be set to resume testing at the Punggye-ri site to inform the design of tactical nuclear warheads.

In May, South Korean President Yoon Suk-yeol and US President Joe Biden reaffirmed their two countries’ commitments to defend each other under the 1953 mutual security treaty. Joint military exercises have been restored from a virtual command post to large-scale physical exercises on the peninsula.

The leaders’ statement should send a strong message to Pyongyang that Washington would fully support Seoul in a crisis. Biden affirmed the US extended deterrence commitment to South Korea using the full range of capabilities encompassing nuclear, conventional and missile defence. That suggests extended nuclear deterrence is still strong, even in the face of an emerging North Korean tactical nuclear threat.

In a practical sense, the US and South Korea have several options for countering tactical nuclear threats, including preventive and pre-emptive strikes against North Korean nuclear forces with precision conventional weapons. However, striking North Korean nuclear forces that are road-mobile is not likely to achieve overwhelming success in a crisis, and seeking to strike the North Korean leadership to prevent nuclear use may see Kim devolve launch authority to field commanders. Nor should reliance be placed on US ballistic missile defence. The US’s current national missile defence and sea-based ballistic missile capabilities provide, at best, a leaky umbrella, not an astrodome defence. That will be particularly the case against larger attacks as North Korea builds up its strategic nuclear forces.

Hence, it’s important that the Biden administration’s still-to-be-released nuclear posture review consider how to respond to ‘escalate to de-escalate’ threats using tactical nuclear weapons, whether from Pyongyang or Moscow. That may require greater investment to accelerate development of conventional prompt-strike capabilities based on hypersonic weapons or greater efforts to enhance the reliability of ballistic missile defence, including another look at boost-phase defence capabilities. Ultimately, there may need to be a debate on the size, posture and structure of future US tactical nuclear forces.

The Biden administration has sought to cancel a proposed sea-based nuclear-armed cruise missile and would continue to rely on a small number of B61-12 free-fall tactical nuclear bombs. But there’s already an imbalance between US tactical nuclear forces based around the remaining B61-12s and the very large Russian tactical nuclear forces. North Korean tactical nuclear weapons add to this imbalance. China appears yet to go down the tactical nuclear weapons path but has invested in regional nuclear capabilities. The yawning gap between US conventional forces and strategic nuclear forces could be exploited in an ‘escalate to de-escalate’ scenario, because it leaves the US with no choice but to respond to a use of a tactical nuclear weapon with a strategic nuclear response.

One option that’s been discussed is whether a build-up of North Korean tactical nuclear weapons might justify a deployment of US tactical B61-12 bombs onto the peninsula as a signal to Pyongyang that extended deterrence won’t falter in a crisis. Prior to his election, Yoon sought that, suggesting a nuclear-sharing arrangement between US and South Korean forces.

An alternative would be for South Korea to develop its own nuclear capabilities—an option that has strong popular support. In a recent poll, 71% of South Koreans backed an independent nuclear deterrent, while only 56% supported the redeployment of US nuclear forces. So, if the US wouldn’t consider a redeployment, South Korea might acquire its own nuclear forces, even if US extended nuclear deterrence remains in place.

South Korea experienced one of the world’s largest initial outbreaks of Covid-19 outside China. But, unlike the United States and many European countries, we have been able to contain and drastically reduce the spread of the virus, at least so far—and without imposing a nationwide lockdown. Our response may provide insights that can help other governments and civil-society groups working to combat the pandemic.

So, how did we do it?

As is widely known, South Korea’s government focused on aggressive testing and contact tracing to contain community transmission and established a strict triage system to protect healthcare workers. But testing and tracing alone didn’t stop the spread of the virus. The country’s civil-society sector—including non-governmental organisations and trade unions—played a critical role by monitoring the situation closely, helping to hold the authorities accountable and reaching the most vulnerable social groups.

The government procured high-quality diagnostic kits based on a tightly coordinated transfer of public-funded technology to private manufacturers, and quickly established a mass testing system in which public health centres played a central part. These early interventions paid off: the country now has more than 600 testing sites, including 80 drive-through centers, capable of testing a total of 20,000 people per day. Individuals with suspected Covid-19 symptoms and contact histories are legally entitled to be tested free of charge.

Each time a new case was identified, local governments used contact tracing to quarantine potential carriers and publicly disclosed their individual travel histories to inform nearby residents of their potential exposure. Those measures helped to contain clusters of infection. And the triage system in hospitals helped to prevent patients with severe symptoms from indiscriminately infecting healthcare workers and other patients.

For contact tracing, the authorities relied on mobile-phone GPS data, credit card transaction records and CCTV footage. While this use of personal data is legal in South Korea and proved effective in combating the virus, it also raised significant privacy concerns. Over the past two months, some patients whose detailed travel history was made public have been blamed, as if they had recklessly put others at risk of infection. The country’s National Human Rights Commission and advocacy organisations have called for an appropriate balance between protecting the public and respecting individual rights, and this debate continues today.

Trade unions, NGOs and the public were also instrumental in pushing the government to protect vulnerable citizens, respect their basic human rights and address the deeply rooted inequalities highlighted by social-distancing measures.

Many low-wage workers, for example, couldn’t work remotely or take paid leave to support themselves and their families. A call centre in southwest Seoul, where workers were crammed into a small, poorly ventilated office, emerged as one of the country’s biggest Covid-19 clusters. And one delivery worker died on the job, collapsing from exhaustion because of the huge increase in online orders. Unions informed the public and policymakers about such problems, based on reports from their rank-and-file members, and advocated for greater employment security, paid sick leave and adequate protective gear, including facemasks.

Public hospitals, which have long suffered from underinvestment, began to take the lead in accommodating the influx of patients. At the same time, the Covid-19 crisis highlighted the inadequacy of South Korea’s private hospitals, which account for 90% of the country’s hospital beds. When the virus struck, they lacked both the necessary equipment and isolation units, because those things weren’t profitable in normal times. As a result, civil-society groups are now demanding that the country’s public healthcare system be expanded.

NGOs cooperated closely with local service providers to identify gaps in care. They monitored assisted-living facilities, homeless shelters and vulnerable individuals at home to ensure that these populations were receiving proper attention. And community volunteers stepped in to provide additional support where local governments lacked the capacity to do so.

Finally, the government responded to civil-society organisations’ demands that migrants and refugees—often the targets of racism and anti-immigrant rhetoric—have access to testing and treatment. For example, the Ministry of Justice announced in early March that undocumented migrants could be tested for Covid-19 without risking deportation, and published multilingual information materials. NGOs working with South Korea’s migrant communities are now disseminating critical information about medical access and paid leave to help support these groups.

As governments around the world increasingly adopt wartime-like measures to fight the pandemic, civil-society groups must prevent policymakers from responding in ways that further exacerbate inequalities or marginalise the most vulnerable groups. Such efforts were crucial to South Korea’s success, and they can help other countries to beat the virus, too.