The investment fund Trump announced evokes a similar $550 billion account pledged by Japan in a successful bid to lower its threatened tariffs. Like the Japanese pledge, likened to a sovereign wealth fund, spending from the South Korean account on investments in the US would be directed by Trump himself, the president said.
Trump also said South Korea had agreed to “accept American product including Cars and Trucks, Agriculture, etc.” That is likely to take the form of an agreement by Seoul to accept cars and trucks built to US motor vehicle safety standards, without subjecting them to additional requirements.
It was not immediately clear if the agreement would guarantee discounted tariffs on automobiles and auto parts from South Korea — a key tension point in recent negotiations between the countries.The 15% tariff rate is the culmination of months of trade talks and helps Seoul — the US’s sixth-biggest trading partner — avert a 25% levy that was set to take effect Aug. 1, alongside fresh penalties for dozens of US trading partners.
“Additionally, South Korea will purchase $100 Billion Dollars of LNG, or other Energy products and, further, South Korea has agreed to invest a large sum of money for their Investment purposes,” Trump said on Wednesday.
The negotiations were especially delicate for the young government in South Korea, as President Lee Jae Myung considered allowing the US greater access to South Korea’s beef and rice markets — a politically sensitive topic that spurred widespread protests back in 2008.
Concessions by Lee risk torpedoing his honeymoon period in office by angering farmers and fracturing his party. His victory in June’s election after months of political turmoil prompted an uptick in sentiment among businesses and consumers and a surge in stocks to record levels.
But the nation was also playing catch-up in the trade talks to prevent higher universal tariffs damaging a fragile economy that’s just emerging from a contraction.
