The US and South Korea finalised a trade deal on Wednesday, after having been engaged in negotiations for months together.
US President Donald Trump, who is in South Korea, announced that an agreement had been reached with the country, during a dinner that had been hosted by South Korean President, Lee Mae Myung at the Asia-Pacific Economic Cooperation summit.
“We did reach a deal on trade,” Trump told reporters as he shook hands with Lee at the event, but did not provide any additional details. He also called his meetings in South Korea “tremendous” and said he had “pretty much finalised a trade deal”.
Meanwhile, South Korea Policy Chief, Kim Yong-beom, also confirmed that a deal had been reached shortly afterward at a press briefing, adding that Seoul would spend $150 billion on shipbuilding in the US and provide $200 billion in cash under an investment pledge.
The White House did not immediately comment on the development.
South Korea had earlier played down the idea that it would pledge $350 billion in investment in the US in exchange for a cut in US tariffs.
Also Read: US going to have a good deal with China: Trump at APEC
“Without a currency swap, if we were to withdraw $350 billion in the manner that the US is demanding and to invest this all in cash in the US, South Korea would face a situation as it had in the 1997 financial crisis,” Lee had said in late September to a leading news agency.
Trade talks between the two countries have been in limbo for about three months now after the US and South Korea rushed to sign an initial deal in late July, in which American tariffs on Korean goods were pegged at 15 per cent.
The US placed higher duties of 25 per cent on Korean car imports which left the nation’s automakers complaining, saying they had been placed at a competitive disadvantage against their Japanese rivals, since Tokyo had got lower 15 per cent tariff on its auto shipments post trade agreements in September.
Kim claims the duties will now come down to 15 per cent.
Just days before the deal was sealed, Lee hinted at sticking points in the $350 billion investment package, even while Trump said the agreement was “pretty close” to completion.
“I think we came to a conclusion on a lot of very important items,” Trump had said, adding that they also discussed national security matters. The US President claimed he had pledged to assist South Korea and North Korea over their tensions.
Earlier this month, the Bank of Korea specified that the sum finalised in the package could be supplied in dollars without having a negative impact on the local currency market.
However, after Wednesday’s meeting with Trump, Lee’s aides said the two sides had now agreed on an investment plan that includes the payment being paid in instalments, capping the annual supply of funds at $20 billion to stabilise the dollar-won market.
Follow us
