US-South Korea agreement: car tariffs at 15%. $350 billion investment from Seoul
The US President also announced potential agreements and tariffs reductions with China and reflected on his term of office. Thursday's meeting with Xi Jinping
Key points
From our correspondent
NEW DELHI - After months of inconclusive negotiations, the United States and South Korea have announced that they have found a compromise to ground the trade agreement laboriously reached last July by their negotiators. The announcement came as a surprise late afternoon, after US President Donald Trump had been welcomed in the ancient capital of Gyeongju in the morning with every possible honour, including the conferment of the country's highest honour and the gift of a replica of a golden crown, the symbol of an ancient local kingdom.
At the end of an 87-minute meeting between the two countries' delegations, led by Trump and his South Korean counterpart Lee Jae Myung, the US president said that a 'trade agreement' had been 'reached' that can be considered 'practically final'. Trump did not provide details, but the South Korean bureau did, explaining what Seoul's promise to invest USD 350 billion in the US economy would result in.
A portion, 150 billion, will be directed towards shipbuilding, so as to revive an industrial sector that has often been at the centre of the White House's negotiating tactics in recent months. In addition to forms of manufacturing cooperation, guarantees and financing will also be part of the package. The remaining 200 billion will go into a fund to invest in the US economy.
The funds, however, will not be disbursed in cash and in one lump sum, as Trump would have wished, but in annual instalments of USD 20 billion, which is the maximum amount indicated in recent weeks by the Bank of Korea so as not to destabilise the dollar-won exchange rate. The funds should not be raised through Seoul's issuance of sovereign debt, but partly through operating profits, interest and dividends generated by Korean assets abroad, and partly through systemic banking institutions such as the Export and Import Bank of Korea.
