South Korea and the United States signed a memorandum of understanding formalizing Seoul’s $350 billion investment commitment, with Industry Minister Kim Jung-kwan and Commerce Secretary Howard Lutnick executing the agreement electronically on Friday. The accord concludes months of negotiations that began with a framework deal in July.
The investment comprises $200 billion in cash installments capped at 20 billion won ($20 billion) annually, plus $150 billion designated for bilateral shipbuilding cooperation. Projects must be selected before President Trump’s term concludes in January 2029, with funds directed toward sectors including energy, semiconductors, pharmaceuticals, critical minerals, artificial intelligence and quantum computing.
Under profit-sharing terms, both nations will split returns equally until initial capital is recovered, after which the U.S. receives 90% and Korea retains 10%. The agreement mandates Washington prioritize Korean firms when selecting project vendors and suppliers, while Seoul must fund approved projects within 45 business days.
In exchange, pharmaceutical exports face maximum tariffs of 15%, while semiconductor levies match terms offered to competitors including Taiwan. The deal represents Seoul’s response to concerns about foreign exchange market stability, with the annual investment ceiling designed to manage currency pressures that initially worried Korean policymakers when Washington sought the full sum upfront.
