Kim Yong-beom (right), the presidential chief of staff for policy, alongside National Security Adviser Wi Sung-lac, speaks during a press briefing at the International Media Center for the Asia-Pacific Economic Cooperation gathering in the southeastern city of Gyeongju on Wednesday. (Pool photo by Yonhap)
Kim Yong-beom (right), the presidential chief of staff for policy, alongside National Security Adviser Wi Sung-lac, speaks during a press briefing at the International Media Center for the Asia-Pacific Economic Cooperation gathering in the southeastern city of Gyeongju on Wednesday. (Pool photo by Yonhap)

GYEONGJU -- South Korea and the United States have finalized an agreement on the details of Seoul's $350 billion investment pledge that lowered US tariffs on Korean products, the presidential policy chief said Wednesday.

"The $350 billion investment pledge will consist of $200 billion in cash installments and $150 billion allocated for shipbuilding industry cooperation, with an annual cap set at $20 billion," Kim Yong-beom, presidential chief of staff for policy, told reporters.

"As the investments will be made in line with business progress within an annual limit of $20 billion, they will remain within a range the Korean foreign exchange market can absorb, thereby minimizing any impact on the market," he said.

Korean companies will lead the shipbuilding cooperation projects, including direct investment and loan guarantees, Kim said.

Under the finalized terms, US "reciprocal" tariffs on Korean goods and sectoral duties on autos will fall from 25 percent to 15 percent as agreed in an initial deal in July.

Pharmaceutical and lumber products will be granted "most-favored nation treatment," while airplane parts, generic pharmaceuticals and natural resources not produced in the US will be exempt from tariffs.

For semiconductors, tariff levels will be set no less favorable than those applied to Taiwan, South Korea's major competitor in the sector, Kim noted.

Seoul and Washington also agreed to incorporate "commercial rationality" into the memorandum of understanding, which is currently near completion, and to split profits equally until the investment amount is recovered.

South Korea additionally secured a safeguard clause, enabling further consultations if the US seeks investments without proper committee review.

"Through this agreement, we expect to improve conditions for Korean companies entering the US market and secure a more favorable export environment than other nations," Kim said."We also anticipate that clarifying the specific scope and timing of tariff reductions will significantly reduce market uncertainty." (Yonhap)