US And South Korea Finalise Joint Trade And Security Agreement In 2023

The White House revealed on November 13 that the United States and South Korea have finalised a joint fact sheet. This document outlines agreements trade and security, following the summit President Donald Trump and South Korean President Lee Jae Myung in October. During their meeting in Gyeongju, South Korea, last month, they agreed to lower U.S. import duties on South Korean goods from 25% to 15%.

President Lee announced that South Korea will build nuclear-powered submarines and collaborate with the US in shipbuilding, artificial intelligence, and the nuclear sector. This was shared during a televised briefing. The agreement includes $150 billion of Korean investment in the shipbuilding sector approved by the United States, referred to as Approved Investments.

US-South Korea Trade Agreement

The US will apply either the higher rate under the U.S.-Korea Free Trade Agreement or the Most Favoured Nation (MFN) tariff, or a 15% tariff on South Korean goods. This is part of its reciprocal tariff policy, as stated by the White House on November 13. For pharmaceuticals, tariffs will not exceed 15%.

The deal also involves an additional $200 billion in Korean investments. These are pledged in the Memorandum of Understanding (MOU) on Strategic Investments, expected to be signed by representatives from both countries. The two leaders expressed their support for South Korean companies' foreign direct investments in the US totalling $150 billion during President Trump's tenure.

Korean Air's Major Aircraft Order

The leaders praised Korean Air's order of 103 Boeing aircraft equipped with GE Aerospace engines. Valued at approximately $36 billion, this order includes various Boeing models such as the 737 MAX, 787 Dreamliner, and 777X passenger and freighter aircraft. By 2025, KAL's total Boeing orders will exceed 150 airplanes.

Additionally, the Buy America in Seoul initiative was highlighted in the deal. Under this initiative, South Korea will work with state governments to organise an annual exhibition featuring US companies. This event aims to promote American goods' export into Korea and will include Small and Medium-sized Enterprises.

Both nations are committed to supporting these investments actively. The White House noted that every effort would be made to promote these initiatives further. The collaboration signifies a strengthened partnership between the two countries across multiple sectors.