Seoul: South Korea will work to flesh out details of its planned US$350 billion investment in the United States, a pledge made as part of a tariff deal with Washington, the industry minister said Tuesday, noting the U.S. will not take 90 percent of the profits from the envisioned investment. When asked whether the U.S. will take 90 percent of the returns from Korea's envisioned investment fund, Industry Minister Kim Jung-kwan said such a claim "does not make sense." Kim's remarks were made in a radio interview with local broadcaster MBC.
According to Yonhap News Agency, Kim stated that the details regarding the sectors targeted and the overall scale of the investment fund have been decided, although further negotiations are required to specify the management of the fund. This comes after U.S. Secretary of Commerce Howard Lutnick claimed that 90 percent of profits from Korea's investment in the U.S. would benefit the American people.
Under the latest trade agreement reached last week, Seoul committed to investing $350 billion, primarily targeting the U.S.' shipbuilding, semiconductor, battery, and other strategic industries. In return, the U.S. administration under President Donald Trump reduced the reciprocal tariff rate for South Korea to 15 percent from the initially proposed 25 percent.
Kim noted that President Trump positively received Korea's proposal for a bilateral shipbuilding cooperation project, "Make American Shipbuilding Great Again" (MASGA). The Korean government has proposed measures to modernize U.S. shipyards, enhance maintenance, repair, and overhaul operations for U.S. naval ships, and provide workforce training.
Regarding auto tariffs, Kim expressed disappointment in not further lowering the tariff rate for Korean vehicles but acknowledged that the country avoided the "worst-case scenario." South Korea aimed to reduce tariffs on Korean cars to 12.5 percent, given the advantage over Japan in auto exports under the Korea-U.S. free trade agreement (KORUS FTA). However, both South Korea and Japan now face 15 percent tariffs when exporting automobiles to the U.S.
Kim addressed criticism that the KORUS FTA has been weakened by Washington's tariff scheme, emphasizing that Korea still benefits from the pact. He cited the example of Korean-style instant noodles, "ramyeon," which face only 15 percent tariffs, unlike Japan's higher tariffs.
Kim also noted President Trump's desire to foster a good relationship with Seoul, highlighting the warm reception of the Korean trade delegation at the White House during the trade deal negotiations.
The industry ministry later asserted that the planned investment in the U.S. would create new business opportunities for Korean companies and enhance economic and supply chain cooperation between the two nations. It also committed to improving sanitary and phytosanitary procedures for imported agricultural products and accepting American safety standards for cars imported from the U.S., as agreed in the trade deal with the Trump administration.