The BGA Korea team, led by Managing Director B.J. Kim, wrote an update to clients on the new fact sheet outlining details of the U.S.-Korea deal.

Context

  • The White House released a comprehensive fact sheet November 14 detailing the full scope of the U.S.-Korea Strategic Trade and Investment Deal, significantly expanding and clarifying the agreement, first announced during the August Korea-U.S. summit in Washington and later developed during President Donald Trump’s state visit to Korea October 29. The document release this time confirms a broad 15 percent tariff ceiling across multiple sectors, formalizes Korea’s $350 billion investment structure, introduces foreign-exchange stability safeguards and outlines new reciprocal market-access commitments that go beyond what had previously been communicated by either government. It also elevates shipbuilding and nuclear cooperation to central pillars of the alliance, marking the agreement as a far more sweeping economic-security package than initially understood.
  • The fact sheet confirms the overall tariff structure — most notably the 15 percent cap across key sectors — and provides detailed rules for how reciprocal tariffs will apply under both the Korea-U.S. Free Trade Agreement and Section 232 authorities. It also codifies Korea’s $350 billion investment commitment, adds foreign exchange stability provisions and outlines a set of Korean obligations across automotive, agricultural, digital and regulatory market-access areas. Importantly, the document raises shipbuilding and nuclear cooperation to core elements of the agreement. It affirms U.S. approval for Korea’s pursuit of nuclear-powered attack submarines, establishes a bilateral shipbuilding working group and opens the possibility of U.S. vessels being constructed in Korean shipyards. It positions Korea as a strategic partner in revitalizing U.S. naval and commercial shipbuilding.

Significance

  • The United States confirmed a 15 percent tariff ceiling on most Korean-origin goods under Executive Order 14257. This applies to automobiles, auto parts and a range of wood products and caps any Section 232 tariffs on pharmaceuticals at the same level. For semiconductors, Korea is guaranteed tariff treatment at least as favorable as any future U.S. agreement with another major semiconductor-trading partner. The United States will also remove supplemental tariffs on Korean generic pharmaceuticals and precursors, certain natural resources not available domestically and Korean aircraft and aircraft parts. The 50 percent steel and aluminum tariff remains unchanged.
  • Korea’s $350 billion pledge is now fully defined. It includes $150 billion in approved shipbuilding investments and $200 billion in strategic investments, limited to $20 billion per year. The fact sheet also adds foreign exchange stability protections, confirming that Korea will not be required to supply investments of more than $20 billion annually and may request adjustments if funding risks destabilize the won.
  • Korea will eliminate the 50,000-unit cap on vehicles compliant to the U.S. Federal Motor Vehicle Safety Standards, ease emissions-certification procedures, accelerate agricultural biotech approvals and ensure nondiscriminatory treatment of U.S. digital service providers. The two countries will also support cross-border data flows and back the World Trade Organization moratorium on digital customs duties. Korea has also committed to recognizing attorney-client privilege in competition cases, advancing accession to the Patent Law Treaty and cooperating on labor and environmental standards.
  • Shipbuilding and nuclear cooperation have been elevated to core alliance pillars. A new U.S.-Korea shipbuilding working group will oversee modernization, workforce development and supply chain resilience, with the potential for U.S. commercial and military vessels to be built in Korea. The United States also supports Korea’s pursuit of nuclear-powered submarines and its progress in civil nuclear fuel-cycle capabilities.
  • The agreement is situated within a wider alliance-strengthening agenda: Korea plans to raise defense spending to 3.5 percent of GDP, will purchase $25 billion in U.S. military equipment by 2030 and will provide $33 billion in support for U.S. forces stationed in Korea. The two sides will deepen nuclear consultations, expand AI-related defense cooperation and increase joint work in cyber and space. They also reaffirm commitments to trilateral cooperation with Japan, stability in the Taiwan Strait and the goals of the 2018 Singapore joint statement on North Korea’s denuclearization.

Implications

  • The fact sheet also situates the deal within a broader modernization of the U.S.-Korea alliance, highlighting Korea’s planned increase in defense spending, firm U.S. commitments to extended deterrence, expanded trilateral cooperation with Japan and deeper coordination on AI, cyber and space. These elements make clear that the trade and investment components — while substantial — constitute only one dimension of a much larger U.S.-Korea economic-security framework.

We will continue to keep you updated on developments in Korea as they occur. If you have any comments or questions, please contact BGA Korea Managing Director B.J. Kim at bjkim@bowergroupasia.com.

Best regards,

BGA Korea Team

A small ginko leaf

Managing Director

B.J. supports BGA clients on the ground in Korea, advising them on stakeholder engagement and larger government affairs and public policy matters in Seoul. A former Korean diplomat, B.J. has advised international firms on political-economic and policy-regulatory affairs since 2003, offering analytical and advisory services on legislative, regulatory and political issues. He also has offered companies hands-on support in their engagement in Korea.  Prior to his career in consulting, B.J. was a diplomat serving two of Korea’s trade ministers as policy counselor and special assistant, developing international economic policies and public communications strategies on export and investment promotion and working ... Read More