The United States and South Korea released the details on Friday based on a report from Reuters. The two countries issued a joint fact document on the summit meeting held last month between US President Donald Trump and South Korean President Lee Jae-myung.
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commerce
Washington and Seoul agreed to impose customs duties on American imports of cars and Korean auto parts at a rate of 15%, down from 25%. The effective date of the car tariffs will be retroactive to November 1 after the agreement is finalized and once a draft law on the $350 billion investment package is submitted to Parliament. US imports of wood products and pharmaceuticals from South Korea will face tariffs of no more than 15%, while aircraft parts and general medicines will be duty-free.
Regarding semiconductors, the United States will offer terms to South Korea that are “no less favorable than those that might be offered in a future agreement covering a volume of semiconductor trade at least as large as South Korea’s.” This means that tariffs on semiconductors will be no less favorable than those imposed on main competitor Taiwan, South Korea’s presidential policy advisor said.
The two countries agreed to work together to address non-tariff barriers in South Korea’s agricultural and digital services sectors, including access to US meat markets, regulations on online platforms, and cross-border transfer of location data. The government-controlled Korea Gas Corporation also signed an agreement to buy about 3.3 million metric tons of US liquefied natural gas annually in long-term agreements.
investment
As part of the $350 billion investment fund, South Korea will pay $200 billion in cash in phased installments of a maximum of $20 billion annually in a bid to keep the won stable, the two countries said. South Korea said it will work to obtain US dollars through means other than market purchases to reduce potential impacts on the local currency market. South Korea could seek to “adjust the amount and timing of funding, and the United States will, in good faith, give due consideration to such a request,” the fact sheet said.
The remaining $150 billion will be allocated to shipbuilding cooperation, which will include loans and guarantees from policy institutions to finance ships as well as private sector investments by South Korean companies.
Fundraising
South Korea said the two sides agreed to split profits equally before recovering initial investments, adding that they would only pursue commercially viable projects.
Source: Market intelligence platform IndexBox
