As the Japanese government finalizes its first investment project in the United States with a total size of 52 trillion Korean won, it is expected that the US government will increase pressure on South Korea’s investments in the US. If South Korea fails to fulfill its commitments to the US investment plan, the US side will reconsider raising tariffs.
In response to this, the South Korean government has decided to send a negotiation delegation to the US to demonstrate its investment intentions. At the same time, if the “Special Law on US Investment” is passed in Parliament in March, the government will push forward the realization of investment projects to avoid the worst-case scenario of tariff hikes.
According to foreign media reports, during tariff negotiations with the US in July last year, Japan agreed to lower the originally set 25% tariff to 15% and implement a total investment of $550 billion in the US.
On February 17, US President Trump announced three initial investment projects by Japan in the US, totaling $36 billion. The two sides have decided to construct a deep-sea crude oil export facility in Texas with an annual export scale of around $33 billion, build the largest natural gas power facility in Ohio, and establish an industrial diamond manufacturing factory in Georgia to promote artificial diamond production.
With Japan’s full-scale investment in the US launched, South Korea is also facing a more pressing situation. Trump has warned that if South Korea does not promptly implement its US investments, tariffs of 25% will be reimposed on South Korea.
In response, the South Korean government dispatched a negotiation delegation led by Assistant Minister Park Jung-sung of the Ministry of Industry, Trade, and Resources to the US on the 18th.
During tariff negotiations with the US last year, South Korea pledged to implement a $350 billion US investment plan.
Of this, $200 billion in investment will be used to promote economic and national security interests in related fields for both countries. The investment areas mentioned in the “Korea-US Strategic Investment Memorandum of Understanding” include energy, semiconductors, pharmaceuticals, critical minerals, artificial intelligence (AI), quantum computing, and more.
Previously, South Korea and the US agreed that the selection of investment projects would be carried out by a negotiating committee chaired by the South Korean Minister of Industry, Trade, and Resources and an investment committee chaired by the US Secretary of Commerce. They will jointly select commercially viable investment projects and report the results to the President.
The remaining $150 billion will be used for the “US Shipbuilding Industry Reconstruction Project,” which is also expected to be officially launched.
Minister Sung-gwan Kim of the Ministry of Industry, Trade, and Resources commented on the $200 billion US investment: “The first project is currently under discussion with several options with the US side.” He added, “The announcement of relevant projects is expected to be made after the special law is enacted and an agreement is reached with the US.”
Regarding the $150 billion investment in the US shipbuilding industry, he stated, “It is also in preparation like other projects.” He added, “Upon completion of negotiations with the US, it will be announced at the appropriate time.”