South Korea announces details of investment in the US: $200 billion in installments, $150 billion poured into the shipbuilding industry

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The details of the trade agreement reached between South Korea and the United States have been officially announced. The $350 billion investment commitment will be implemented in two parts: cash and project investments, with an annual payment cap set to protect the stability of South Korea’s foreign exchange market.

On Thursday in Gyeongju, South Korea’s chief policy advisor Kim Yong-beom revealed that both sides had agreed to divide the $350 billion investment into $200 billion in installments of cash payments and $150 billion in shipbuilding cooperation projects. The cash portion will have an annual payment cap of $20 billion to avoid shocks to the Korean won exchange rate.

On tariffs, the United States will lower its import tariff on Korean cars and auto parts from the current 25% to 15%, matching Japan. South Korea also successfully avoided further market opening in agricultural products such as rice and beef. According to a White House statement, South Korea’s state-owned Korea Gas Corporation will sign an agreement to purchase about 3.3 million tons of American liquefied natural gas annually.

According to a report by The Korea Herald on October 29, cited by Reference News, U.S. President Trump said on the 29th that Washington and Seoul are “very” close to finalizing a new trade deal. He called South Korea an important economic and security partner for the United States and urged increased Korean investment in U.S. industries.

$200 Billion in Installment Payments, $150 Billion Poured into Shipbuilding

South Korea agreed to $200 billion in installment cash payments, and included multiple protective measures in the investment agreement to reduce the impact on its domestic foreign exchange market. The annual $20 billion cash payment cap is a key arrangement.

The Bank of Korea previously stated that $20 billion per year may be the maximum amount Seoul can bear without disturbing the foreign exchange market. This installment mechanism will help keep the won’s onshore market stable amid capital outflows.

The remaining $150 billion will go to shipbuilding cooperation, including guarantees, investments by Korean enterprises, and ship financing. The Seoul side said this would reduce the burden on the Korean foreign exchange market and increase the chances for Korean companies to win orders.

Kim Yong-beom pointed out that the agreement’s structure is similar to the one Japan reached with the U.S. in September, but Korea secured additional protective measures to buffer potential shocks to the domestic foreign exchange market, such as the $20 billion annual cap.

Specific Investment Projects Implemented

According to the White House, Korean cable manufacturer LS Group has committed to investing $3 billion by 2030 to build grid infrastructure in the U.S., such as undersea cables.

In shipbuilding, Korean company HD Hyundai will partner with U.S. investment firm Cerberus Capital Management on a $5 billion investment project to improve U.S. shipyards and supply chains.

As per the agreement signed by government-controlled Korea Gas Corporation, the company will enter into a long-term agreement with sellers to purchase about 3.3 million tons of American LNG annually.

The White House said that the two countries have also signed Memorandums of Understanding to increase cooperation in strategic science and technology fields such as artificial intelligence and space exploration.

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