President Donald Trump and South Korean President Lee Jae Myung finalized a trade deal that will include $350 billion in South Korean investments in U.S. industry. South Korea says a big portion of the funds will be directed to reviving U.S. shipbuilding.
As part of the deal, the U.S. agreed to lower tariffs on South Korean autos and parts, the country’s biggest export to the U.S., to 15%, a South Korean official said in a news conference.
Perhaps more important for the country, Trump eased up on demands that South Korea make a $350 billion upfront payment for an investment fund that would be directed by the White House and Commerce Secretary Howard Lutnick into U.S. projects. South Korea had warned that such a large payment could tank the country’s economy and destabilize its currency, the won.
Instead, South Korea said it would make up to $20 billion in annual investments for 10 years directed by the U.S. in projects considered likely to give the country a return on its investment. In addition, South Korea said it would set aside $150 billion specifically for U.S. shipbuilding projects. The money includes direct investments, loans and loan guarantees.
In another shift, South Korea said profits from projects would be split 50/50. Lutnick had said in July in a post on X that the U.S. would get 90% of the profits.
The country is the world’s second-largest shipbuilder behind China, and some South Korean firms are already expanding in the U.S. Shipbuilder Hanwha Ocean acquired the Philly Shipyard in Philadelphia last year. Hanwha has already announced around $5 billion in U.S. investments.
South Korean officials in the past have said the rest of the money could go to a number of other industries that the U.S. has pegged as vital to national security. Those include critical minerals, batteries, chips, pharmaceuticals, artificial intelligence and quantum computing.
The White House and Commerce Department did not immediately respond to requests for comment.