South Korea's ruling Democratic Party submitted a special bill on Wednesday to support a $350 billion investment pledge to the United States under a tariff deal finalized last month. The legislation codifies tariff cuts on Korean automobiles from 25 percent to 15 percent with retroactive application. The opposition demands parliamentary ratification, signaling potential partisan disputes.
South Korea's ruling Democratic Party (DP) submitted a special bill on November 26, led by floor leader Rep. Kim Byung-kee, to codify the outcomes of a bilateral tariff deal reached during the October 29 summit in Gyeongju between President Lee Jae Myung and U.S. President Donald Trump. The agreement commits Seoul to a $350 billion investment in the United States, comprising $200 billion in cash installments with an annual cap of $20 billion and an additional $150 billion for shipbuilding cooperation.
In exchange, the U.S. will reduce tariffs on Korean automobiles from 25 percent to 15 percent, applied retroactively from November 1, the start of the submission month. Shortly after submission, Industry Minister Kim Jung-kwan sent an official letter to U.S. Commerce Secretary Howard Lutnick, urging prompt publication of the tariff cuts in the Federal Register.
The bill establishes the Korea-U.S. Strategic Investment Corp. on a temporary basis for up to 20 years to manage the $350 billion fund, sourced from earnings on foreign exchange reserves entrusted by the government and the Bank of Korea, as well as overseas government-guaranteed bonds. It mandates compliance with memorandum of understanding (MOU) safeguards, including the $20 billion annual cap, adjustments for foreign exchange market stability, and selection of commercially reasonable projects.
The two countries will form a Consultation Committee led by Korea's industry minister and an Investment Committee headed by the U.S. commerce secretary to oversee a U.S.-side special purpose vehicle (SPV) for joint projects. The DP argues the MOU is not a binding treaty under international law and requires no ratification, with senior deputy floor leader Rep. Huh Young stating, "As there is mutual trust between South Korea and the United States, ratification is not necessary." The main opposition People Power Party (PPP) counters that the investment's scale demands National Assembly approval, potentially complicating review in the Strategy and Finance Committee chaired by PPP's Rep. Lim Lee-ja. Kim Byung-kee vowed, "(We) will spare no effort for the National Assembly's support to expand the diplomatic achievements made in tariff negotiations to economic results," promising thorough review to incorporate business demands.
