The two countries also agreed to remove specific non-tariff barriers, including lifting the cap on imports of vehicles compliant with FMVSS.  

SEOUL/WASHINGTON,  (Reuters) - The U.S. and South Korea released details of a trade agreement that includes a $150 billion Korean investment in the American shipbuilding sector and an additional $200 billion earmarked for industrial sectors, the two countries said.

The joint announcement followed a meeting in October between South Korean President Lee Jae Myung and U.S. President Donald Trump, where they agreed to a deal that would cut American import duties on South Korea's products to 15% from 25%.

Planned investments from South Korea

The document confirms a total of $350 billion in planned investments from South Korea, including $150 billion in shipbuilding and $200 billion tied to a draft memorandum on strategic investments. These figures had not previously been made public. 

 Non-binding document on strategic investments

South Korea's Industry Minister Kim Jung-kwan and U.S. Commerce Secretary Howard Lutnick signed a memorandum of understanding on Friday, a 27-point non-binding document on strategic investments. It lays out a schedule for implementation of projects that will be selected by the U.S. president after consultations with South Korea, and Seoul is required to transfer funds within 45 days of the decisions.

The trade deal caps more than three months

The announcement of the trade deal caps more than three months of wrangling over Trump's tariffs that have targeted trading partners around the world. South Korea was particularly alarmed by the prospect of crushing duties on key exports like semiconductors and autos.

Shipbuilding, AI, and the nuclear industry,

Under the agreement, Lee said South Korea will form a new partnership with the U.S. on shipbuilding, AI, and the nuclear industry, helping its ally "rebuild crucial industries just as the U.S. helped South Korea in the past.

The two countries also agreed to remove specific non-tariff barriers, including lifting the cap on imports of vehicles compliant with FMVSS.  The fact sheet additionally confirms joint initiatives in shipbuilding, cybersecurity, space and civil nuclear cooperation, and notes U.S. support for preparatory work related to a South Korean nuclear-powered submarine project.

Shipbuilding to the top of the agenda

n a previous meeting between Trump and Lee elevated shipbuilding to the top of the agenda. Trump said: “In World War II, the US built one ship a day, but now the US shipyard is quite devastated,” stressing the need to revive US shipbuilding. The July framework already included South Korea’s $150 billion pledge to rebuild US shipyard capacity with Korean expertise. At the summit, Trump went further, signaling possible coproduction: Korean firms building ships at American yards with US labor. 

It is noteworthy that Lee, who took office five months ago with a mandate to steer the country away from the shock of a failed martial law imposition by his predecessor, had sought to score an early diplomatic win by turning an economic threat into an opportunity to boost the country's trade and security status

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Agencies 

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