Seoul Will Invest $200 Billion, As Much As $20 Billion A Year

The U.S. and South Korea said they had agreed to terms on a trade deal, a surprise breakthrough following months of contentious talks over $350 billion in investments Seoul has pledged to America.
The agreement between two countries laid out a plan for $200 billion in investment spread over years not to exceed $20 billion a year. The remaining $150 billion would be invested in rebuilding America’s shipbuilding. South Korean President Lee Jae Myung has said an upfront outflow of $350 billion in cash as earlier demanded by U.S. President Donald Trump would seriously destabilize South Korea’s currency.
The total $350 billion that would be invested in the American economy, after negotiations and ceremonies that included the presentation of a gold medal and crown to President Trump.
Trump and Lee had finalized details of their fraught trade deal on how to structure a $350 billion investment in the U.S. in return for cuts to import duties on South Korean goods, on October 29, at Gyeongju, South Korea, which 2025 Asia-Pacific Economic Cooperation (APEC) summit held on October 27.
In recent days, South Korean officials played down the likelihood of closure for tariff talks, which have been closely watched by other U.S. trading partners as a barometer for how their own unresolved negotiations might go. Some Trump officials had also privately harbored doubts.
A South Korean official laid out more information about the terms of a trade agreement between South Korea and the U.S., including a $350 billion investment package that Trump has been seeking.
South Korea will invest $200 billion in the U.S., capped at $20 billion a year, and also join in a shipbuilding partnership valued at $150 billion, South Korea’s senior secretary for policy, Kim Yong Beom, said. Mutual tariffs will remain at 15%, and tariffs on South Korea’s cars and auto parts will be cut to 15%, the secretary said. The shipbuilding efforts will be led by Korean companies, the secretary said.
South Korean official announced the agreement on Oct. 29, after Trump and Lee met on the sidelines of the Asia-Pacific Economic Cooperation summit. It was the latest stop on a nearly a weeklong trip to Asia by President Trump, before the meeting with Chienese President Xi Jinping.
The U.S. agreement with South Korea came after months of back-and-forth negotiations. Going into President Trump’s visit, expectations were low for a trade deal to be finalized.
South Korea had agreed to a framework of a deal in July, but the two sides have struggled to find common ground on the details around President Trump’s demand that South Korea commit to investing $350 billion in the United States.
Initially, there was confusion on Oct. 29 evening of over whether the sides had come to an agreement. Before a dinner with other leaders at the summit in Gyeongju.
President Trump said the United States had reached a deal. Then a little later, he seemed to walk back those comments, saying it had nearly finalized a deal.
Earlier in the day, officials flattered President Trump during public events. President Lee presented him with a medal symbolizing the nation’s highest honor. Then came a replica of a golden crown that was excavated from one of the ancient royal tombs in Gyeongju, the seat of a long-gone kingdom. “I’d like to wear it right now,” Trump said.
Until Oct. 29, talks had been hung up in large part over the investment provision. The United States wanted a cash investment, but South Korea expressed concern that committing such a sizable sum of money could destabilize its currency.
The United States lowered import tariffs on South Korean goods to 15% from the 25% rate that went into effect in August. In addition, the United States agreed to accept cash investments of up to $20 billion a year, and set aside another $150 billion to invest in its American shipbuilding operations.
The two nations agreed that South Korea would invest in projects that were commercially reasonable. It would not invest as a lump sum up front but would spread out the money based on the progress made in those projects.
That way, “we can minimize the impact on our foreign currency market,” Korean official said. South Korea’s currency, the won, has lagged the dollar, eating into the country’s buying power and causing alarm in a country where bitter memories of a financial crisis in the late 1990s still linger.
The two countries would appoint a South Korean manager to oversee the projects.
The profits will be divided equally between South Korea and the United States until the principal and interest are repaid.

South Korea added a provision to the agreement that would allow it to request adjustments to the timetable and the annual investment amount if the country faces financial instability.
South Korea scored more concessions and landed a generally less onerous deal than Japan, which has agreed to invest $550 billion in the United States under its trade deal. A memorandum of understanding between Washington and Tokyo stated that President Trump will select how the money will be invested. If Japan goes against his wishes, he will have the right to impose higher tariffs.
Also, after Japan recoups its initial money on an investment, 90% of the profits would go to the United States.
South Korea passed a bill through its National Assembly to implement the trade deal. The governing party has majority control at the Assembly.
As one of the most advanced shipbuilding countries, South Korea is at the forefront of President Trump’s initiative to leverage foreign investment to turn around the U.S. industry, which has fallen behind China’s. South Korea has seemed to embrace its role, coining the slogan “MASGA,” or Make American Shipbuilding Great Again.
South Korean companies will take the lead in deciding how to invest $150 billion in the American shipbuilding industry. The sum will include direct investments and loan guarantees.
But after the Trump administration started imposing fees this month on Chinese ships that dock at American ports, Hanwha became collateral damage in the trade war between Beijing and Washington. China announced that it would impose sanctions on five U.S. subsidiaries of Hanwha Ocean, the company’s shipbuilding arm, accusing it of “supporting and assisting” the United States in its investigation into the trade practices of the Chinese shipbuilding industry.
Trump said, “Additionally, they have agreed to buy our Oil and Gas in vast quantities, and investments into our Country by wealthy South Korean Companies and Businessmen will exceed 600 Billion Dollars. Our Military Alliance is stronger than ever before and, based on that, I have given them approval to build a Nuclear Powered Submarine, rather than the old fashioned, and far less nimble, diesel powered Submarines that they have now.”
In exchange, the U.S. will lower the tariffs on South Korean goods to 15%. While most South Korean goods already face a 15% tariff, South Korean automobiles have been hit with a 25% duty, a higher rate than the country’s main automaking competitors, Japan and the European Union.
Pharmaceuticals, timber and lumber products will also receive “most-favored nation” tariff treatment. Airplane parts, generic drugs and natural resources not produced in the U.S. will be exempt from U.S. tariffs.
Seoul’s $350 billion investment pledge has been a sticking point in the trade negotiations with the Trump administration. In particular, South Korean officials have balked at Trump’s demands to pony up an “upfront” payment to the U.S. government, which they warned would crater their economy.
Instead, Lee has pushed for the $350 billion to come from a mix of direct investments, loans, loan guarantees and other financial safeguards.★

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