South Korea and the United States have signed a memorandum of understanding (MOU) on Seoul’s USD350 billion investment pledge made in return for the lowering of US tariffs, the industry ministry said Friday.
The MOU was electronically signed by South Korean Industry Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick, according to the Ministry of Trade, Industry and Resources.
On Oct. 29, the two sides reached an agreement on the details of Seoul’s USD350 billion investment pledge made in exchange for lower U.S. tariffs.
Under the final terms, the investment will consist of USD200 billion in cash installments, with an annual cap set at USD20 billion, and an additional USD150 billion for bilateral shipbuilding cooperation.
The US has lowered reciprocal tariffs for Korea to 15 percent from 25 percent as of Aug. 7, and plans to cut tariffs on Korean cars and lumber also to 15 percent, the industry minister said in a press briefing.
Korean pharmaceutical products will also face a tariff rate no greater than 15 percent, with semiconductors to be subject to tariff rates “no less favorable” than those applied to competitors, such as Taiwan.
The MOU on the envisioned investment stipulates that the two countries will select projects to be funded by Seoul’s USD200 billion package before US President Donald Trump’s term ends in January 2029, according to Kim.
The USD200 billion will be funneled into “commercially reasonable” projects related to advanced industries outlined in a joint fact sheet released by both Seoul and Washington earlier in the day. Such sectors include energy, semiconductor, pharmaceuticals, critical minerals, artificial intelligence and quantum computing, among others. (PNA)