South Korea, US Clinch Deal On Details of Investment Pledge

GYEONGJU, South Korea, Oct. 29 (Bernama-Yonhap) -- South Korea and the United States (US) have finalised an agreement on the details of Seoul's US$350 billion investment pledge that lowered US tariffs on Korean products, said Chief Presidential Secretary for Policy Kim Yong-beom.

The agreement was reached in time for South Korean President Lee Jae Myung's summit with US President Donald Trump in the southeastern city of Gyeongju, following nearly three months of intense negotiations to narrow gaps on the details of the investment pledge.

"The US$350 billion investment pledge will consist of US$200 billion in cash installments and US$150 billion allocated for shipbuilding industry cooperation, with an annual cap set at US$20 billion.

"As the investments will be made in line with business progress within an annual limit of $20 billion, they will remain within a range the Korean foreign exchange market can absorb, thereby minimising any impact on the market," he told Yonhap News Agency.

He said the Korean companies will lead the shipbuilding cooperation projects, including direct investment and loan guarantees.

Under the finalised terms, the US’ reciprocal tariffs on Korean goods and sectoral duties on autos will fall from 25 per cent to 15 per cent as agreed in an initial deal in July.

Pharmaceutical and lumber products will be granted "most-favoured nation treatment," while aeroplane parts, generic pharmaceuticals and natural resources not produced in the US will be exempt from tariffs.

Kim noted that tariff levels for semiconductors would be set at rates no less favourable than those applied to Taiwan, South Korea’s main competitor in the sector.

Seoul and Washington also agreed to incorporate "commercial rationality" into the memorandum of understanding (MoU) and to split profits equally until the investment amount is recovered.

South Korea additionally secured a safeguard clause, enabling further consultations if the US seeks investments without proper committee review.

"Through this agreement, we expect to improve conditions for Korean companies entering the US market and secure a more favourable export environment than other nations.

"We also anticipate that clarifying the specific scope and timing of tariff reductions will significantly reduce market uncertainty,” he said.

--BERNAMA-YONHAP