Historic Trade Agreement Signed

In a landmark move, the Korea-U.S. trade agreement, promising a staggering $450 billion, was signed by U.S. President Donald Trump. This deal aims to lower reciprocal tariffs by 10 percentage points, combining a $350 billion investment fund for the U.S. and $100 billion in expanded imports of U.S. energy, including liquefied natural gas (LNG).

Investment Fund Structure

The $350 billion investment fund operates on a "capital call" basis, where funds are raised as investment demands arise. The U.S. will identify promising projects for Korea to invest in, with direct equity investments capped at less than 5%.

Profit Retention Controversy

A contentious point is the U.S. retaining 90% of profits from Korea's investments. U.S. Commerce Secretary Howard Lutnick stated these profits would benefit the American people, sparking debate over the fund's terms.

LNG Import Expansion

Korea commits to importing $100 billion worth of U.S. LNG over 3.5 years, a significant increase from previous years. This move, while diversifying energy sources, raises concerns over potential price shocks and contract adjustments with existing suppliers.

Government's Next Steps

The Korean government plans to detail the investment fund's creation, LNG import conditions, and industry impacts in a public briefing next week.