South Korea Accepts US Condition On New Trade Deal

South Korea has finalised a new trade agreement with the United States of America on Wednesday, following a bilateral meeting between President Lee Jae Myung and Donald Trump on the sidelines of the Asia-Pacific Economic Cooperation.

According to CNN, the South Korean presidential chief of staff for policy, Kim Yong-beom, told reporters in Gyeongju, disclosing the details of the agreement.

According to the report, the agreement on the big frame of the trade deal in July had brought the reciprocal tariff down to 15%, but South Korea’s automobile export was still subject to a 25% tariff rate and details on the agreement were not concluded until Trump met with Lee on the sidelines of APEC.

In the agreement, President Trump demanded a $350 billion investment upfront.

Among the $350 billion investments Trump demanded upfront, Kim said that $200 billion will be done in cash and $150 billion through shipbuilding cooperation, which will be led by South Korean companies.

The $200 billion investment will be done over many years, with yearly investment limited to $20 billion depending on the business progress, Kim said.

He added that such a limit would make it manageable for the South Korean foreign-exchange market, which was the biggest concern for Seoul when asked to originally pay $350 billion in cash.

Wednesday’s agreement will lower automobile tariffs to 15%, same rate as competitor Japan, and semiconductor tariff rate that is not unfavorable compared to rival Taiwan, Kim said.