The United States and South Korea unveiled a sweeping economic and security agreement on Thursday, outlining hundreds of billions of dollars in Korean investment alongside major U.S. tariff concessions and expanded defence cooperation. According to the White House, Washington has approved US$150 billion of Korean investment in the U.S. shipbuilding sector, as well as a further US$200 billion in “strategic investments” committed under a new Memorandum of Understanding.
In a significant military shift, the U.S. has authorised South Korea to build nuclear-powered attack submarines, while Seoul has pledged US$25 billion in U.S. military equipment purchases by 2030 and shared plans to lift defence spending to 3.5% of GDP “as soon as possible.” Korea also outlined comprehensive support for U.S. Forces Korea totalling US$33 billion under domestic legal frameworks.
On trade, the U.S. will reduce Section 232 tariffs on Korean automobiles, auto parts, timber, lumber and wood derivatives to 15%, and intends to apply no more than a 15% Section 232 tariff on Korean-origin pharmaceuticals. South Korea, meanwhile, committed to eliminating the 50,000-unit cap on U.S.-made vehicles entering the country without modification and agreed to work with Washington to address non-tariff barriers affecting food and agricultural trade.
The package represents one of the most extensive bilateral deals announced during the current administration, spanning investment, defence, and market access.
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This article was written by Eamonn Sheridan at investinglive.com.