South Korea's government has announced that it has finalized an agreement to build nuclear-powered submarines in partnership with the United States.

The US has approved the attack submarines and agreed to cooperate in sourcing fuel, according to a fact sheet released by the White House on Thursday.

The agreement marks a significant step in South Korea's relations with the US and comes amid a period of growing tensions on the Korean Peninsula: with the nuclear-armed North Korea, and an expansionist China to the west.

Here's what you need to know about the agreement.

What's in the agreement?

The agreement between the US and South Korea comes as leaders from both countries reached a broad trade deal earlier last month that would see reciprocal tariffs cut to 15% from 25%.

US President Donald Trump had slapped a tariff rate on Seoul of 25% earlier this year - which his counterpart Lee Jae Myung managed to negotiate down to 15%, after Seoul said it would invest $350bn (£265bn) in the US, including $200bn in cash investment and $150bn in shipbuilding.

In a White House readout released on Thursday, the US said it had given approval for the Republic of Korea to build nuclear-powered attack submarines... [and would] work closely to advance requirements for this project, including avenues to source fuel.

Only six countries currently possess nuclear-powered strategic submarines: the US, China, Russia, the UK, France and India.

South Korea already possesses about 20 submarines, but they are all diesel propelled and therefore need to surface far more frequently. Nuclear submarines are also able to operate further and faster.

Why does South Korea want nuclear submarines?

The latest vessel programme is aimed at countering North Korea, which recently revealed that it was pursuing its own nuclear submarine programme.

In a TV interview last week, Ahn Gyu-back, South Korea's Minister of Defence, said that nuclear submarines would be a proud achievement for South Korea, and a major leap in strengthening the country's defence against the North.

Does North Korea have nuclear submarines?

North Korea has also been pursuing a nuclear submarine programme – possibly with Russia's help, according to South Korean officials.

Will this inflame tensions on the Korean Peninsula?

It is unclear how much the nuclear-propelled submarines will contribute to South Korea's defence capabilities – and though they are very expensive, they don't quite change the balance of power on the Korean Peninsula, according to some experts.

What's in it for the United States?

For Washington, support for South Korea's nuclear-powered submarine programme likely aims to put pressure on both North Korea and China.

What next?

Although President Trump said the submarines would be built in Philadelphia and bring jobs to the US, South Korean officials have maintained they must be built locally, where existing facilities can deliver them in a much shorter timeline.