Key Points
- South Korea’s industry minister is making an urgent trip to the U.S. to finalize a tariff deal.
- The deal has been held up by the details of a $350 billion South Korean investment in the U.S.
- The U.S. is reportedly no longer insisting on an “upfront” payment, a major breakthrough.
- A final deal is crucial for South Korean carmakers, who are still facing 25% U.S. tariffs.
South Korea’s industry minister is heading back to the U.S. on Wednesday for urgent talks to finalize a tariff deal that has been held up by a massive $350 billion investment pledge. The last-minute push comes just before the leaders of the two countries are set to meet at an Asia-Pacific summit later this month.
The minister, Kim Jung-kwan, had just returned from a trip to the U.S. two days ago, where he was trying to iron out the final details of the deal. The main sticking point has been a huge $350 billion investment that South Korea has promised to make in the United States. Washington had initially been insisting on an “upfront” payment, a demand that Seoul said would wreck its currency market.
However, there are now signs of a breakthrough. South Korean officials have said the U.S. is no longer demanding the upfront payment, raising hopes that a final deal is within reach.
This optimism has already sent shares of South Korean carmakers Hyundai and Kia rallying. A final trade deal is crucial for them because U.S. tariffs on South Korean cars remain at a high 25%, while duties on other imports have been reduced to 15%.
With the APEC summit just around the corner, both sides are under pressure to get this deal across the finish line.
