USA and South Korea reached an agreement on investments worth USD 350 billion

USA and South Korea reached an agreement on investments worth USD 350 billion that Seoul will make in the United States, an adviser to the president of South Korea announced on Wednesday. Kim Jong Bom. This is part of a broader trade agreement that aims to avoid high US tariffs on Korean products.

As Kim announced during the evening briefing, the decision was made during a meeting between Presidents Li Jae Mjung and Donald Trump on the sidelines of the Asia-Pacific Economic Community (APEC) summit in Gyeongju.

Moments earlier, in a conversation with journalists, Trump only stated that “we managed to” conclude an agreement, but did not provide further details.

– The investment in the US worth USD 350 billion consists of USD 200 billion in cash and USD 150 billion in cooperation in the shipbuilding sector – said the spokesman. He added that, unlike Japan's similar agreement with the US, the Korean side negotiated an annual cash investment limit of USD 20 billion.

This limit “means that investments will be made depending on the progress of projects, which is within the capabilities of our currency market and minimizes its impact on the market,” Kim explained.

Cooperation in the shipbuilding sector worth $150 billion will be led by Korean companies and will include both investments and guarantees.

During afternoon talks, Li vowed to “support the revival” of the U.S. shipbuilding sector through “expanded investments.” Trump, in turn, complimented South Korea's skills, saying that the country had become a “champion” in this industry. He added that thanks to cooperation, “we will become the best in a short time.”

In exchange for the investment package, South Korea obtained favorable trade conditions.

The agreement includes maintaining the current customs duties at 15 percent, including on cars. It also assumes most-favored nation status for pharmaceuticals and wood products, and zero tariffs on aircraft parts, generic drugs and natural resources that are not mined in the US.

The Korean side also assured itself that the tariffs on semiconductors will not be less favorable than those imposed on its main competitor – Taiwan. Kim added that they also managed to block US demands to further open the Korean market to agricultural products such as rice and beef.

In his speech opening the afternoon talks with the American delegation, the South Korean president also made a direct appeal to Trump to agree to deliver fuel to the planned South Korean nuclear-powered submarines, which, in his opinion, will “significantly reduce the burden on American forces.”

He also pledged to increase spending on defense and the defense industry to “significantly strengthen its self-defense capabilities.”

The presidents officially confirmed that there will be no meeting between Trump and North Korean leader Kim Jong Un. The US president cited scheduling problems as the reason. “We really didn't manage to coordinate the time,” he said.

In turn, President Li assessed that Trump's willingness to talk creates a “warm atmosphere of peace” on the peninsula.

“I know you (South and North Korea) are officially at war and we will do everything we can to fix it,” Trump said.

The first day of Trump's visit to Korea was ceremonial. In recognition of the American leader's role as a “peacemaker” on the peninsula, he was honored with the Grand Order of Mugunghwa – the highest state decoration that no US president has ever received. The US leader was also presented with a replica of a gold crown from the times of the Silla kingdom, whose capital was Gyeongju. The gift, it said, is intended to symbolize “a new era of peaceful coexistence and shared growth that the United States and South Korea will work together to achieve.”

After presenting it, Trump said: “I would like to wear it right now.”

Krzysztof Pawliszak (PAP)

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