The US and South Korea yesterday released details of a trade agreement that includes a US$150 billion South Korean investment in the shipbuilding sector in the US and an additional US$200 billion earmarked for industrial sectors, the two countries said.
The joint announcement followed a meeting last month between South Korean President Lee Jae-myung and US President Donald Trump, during which they agreed to a deal that would cut US import duties on South Korea’s products to 15 percent from 25 percent.
“Finally, the South Korea-US trade, commerce and security negotiations, which were among the biggest variables affecting our economy and security, are ... concluded,” Lee said yesterday. “Good competition requires excellent partners and I believe President Trump’s rational decision played a significant role in achieving meaningful agreement.”
Photo: AFP
South Korean Minister of Trade and Industry Kim Jung-kwan and US Secretary of Commerce Howard Lutnick signed a memorandum of understanding, a 27-point non-binding document on strategic investments.
The document lays out a schedule for implementation of projects that would be selected by the US president after consultations with South Korea, and Seoul is required to transfer funds within 45 days of the decisions.
The announcement of the trade deal caps more than three months of wrangling over Trump’s tariffs that have targeted trading partners around the world. South Korea was alarmed by the prospect of crushing duties on key exports such as semiconductors and autos.
Under the agreement, Lee said that South Korea would form a new partnership with the US on shipbuilding, artificial intelligence and the nuclear industry, helping its ally “rebuild crucial industries, just as the US helped South Korea in the past.”
A fact sheet released by the White House said that the US gave approval for South Korea to build nuclear-powered submarines and would work closely with Seoul to find “avenues to source fuel.”
Washington also accepted South Korea’s request that US$200 billion in cash investments would come in installments no larger than US$20 billion a year in an effort to keep the won stable.
The fact sheet said the countries agreed that South Korea’s investments should not “give rise to market instability.”
If signs of instability appeared, South Korea could seek an “adjustment in the amount and timing of the funding, and the United States will, in good faith, give due consideration to such request,” it said.
The US would cut tariffs on South Korean products including autos to 15 percent from 25 percent.
Semiconductors would be subject to tariff terms no less favorable than those for Taiwan, a presidential adviser said.
The agreement with Washington showed that Lee made inroads on major security and energy initiatives by paving the way to build nuclear-powered submarines and expanding its nuclear energy capabilities.
Lee’s national security adviser said that the countries had discussed the issue of nuclear-powered submarines on the “premise” that the vessels would be built in South Korea.
Trump previously said that the submarines would be built in a South Korean-owned shipyard in Philadelphia.
Under the deal, the US pledged to cooperate on finding a way for South Korea to enrich uranium and reprocess spent nuclear fuel.
Analysts said that it was too early to say whether South Korea got a better deal than Europe and Japan.
Kim Dong-yup, a former South Korean navy officer at Kyungnam University in Changwon-si, said that the agreement on nuclear energy and security meant Seoul had to pay much more for defense, but Lee was faced “with an inevitable choice.”
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
DOMESTIC COMPONENT: Huang identified several Taiwanese partners to be a key part of Nvidia’s Vera Rubin supply chain, including Asustek, Hon Hai and Wistron Nvidia Corp chief executive officer Jensen Huang (黃仁勳), addressing crowds at the company’s biggest annual event, unveiled a variety of new products while predicting that its flagship artificial intelligence (AI) processors would help generate US$1 trillion in sales through next year. During a two-and-a-half-hour keynote address, Huang announced plans to push deeper into central processing units (CPUs) — Intel Corp’s home turf — and introduced semiconductors made with technology acquired from start-up Groq Inc. The company even said it was developing chips for data centers in outer space. At the heart of Huang’s speech was the message that demand for computing power
OPTIMISTIC: Inflation still has a chance of remaining below the central bank’s 2 percent alert level, as Taiwan’s economy is resilient with healthy exports, the NDC minister said Taiwan’s inflation could exceed 2 percent this year if oil prices continue to surge amid escalating tensions in the Middle East, prompting the government to reassess its economic outlook, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. DGBAS Minister Chen Shu-tzu (陳淑姿) told lawmakers at a meeting of the legislature’s Finance Committee that the agency’s earlier growth forecast of 1.68 percent in the consumer price index (CPI) and 7.71 percent for GDP this year did not account for the ongoing Middle East conflict and would need revision, if tensions persist. The previous forecast assumed an average international crude price of
RSS