Seoul: South Korea and the United States have formalized a memorandum of understanding (MOU) regarding Seoul's USD350 billion investment commitment in return for reduced US tariffs, as announced by the industry ministry on Friday. The MOU was signed electronically by South Korean Industry Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick, according to the Ministry of Trade, Industry and Resources.

According to Philippines News Agency, the agreement, reached on October 29, details Seoul's USD350 billion investment pledge in exchange for the lowering of US tariffs. The investment includes USD200 billion in cash installments, capped annually at USD20 billion, and an additional USD150 billion focused on bilateral shipbuilding collaboration.

Effective August 7, the United States reduced reciprocal tariffs on Korea to 15 percent from 25 percent and plans to similarly reduce tariffs on Korean cars and lumber. The industry minister also noted that Korean pharmaceutical products will face a tariff rate no higher than 15 percent, and semiconductor tariffs will be comparable to those applied to other competitors, such as Taiwan.

The MOU specifies that the two nations will select projects to be funded by Seoul's USD200 billion package before the conclusion of US President Donald Trump's term in January 2029, as stated by Kim. The funds will be allocated to projects deemed "commercially reasonable" and linked to advanced industries, as outlined in a joint fact sheet released by Seoul and Washington. Key sectors include energy, semiconductors, pharmaceuticals, critical minerals, artificial intelligence, and quantum computing, among others.