US-South Korea $350 Billion Agreement Seeks to Bolster Economic Stability and Address China’s Influence

The United States and South Korea have reached a historic agreement that redefines their economic and security partnership. Announced on November 14, the accord features a $350 billion commitment from South Korea to invest in American industries, major tariff cuts, and enhanced defense ties, including permission for Seoul to develop nuclear-powered submarines.

, this deal, finalized during President Donald Trump’s latest trip to South Korea, aims to resolve trade disputes and strengthen strategic cooperation in a rapidly changing global environment.

A central element of the agreement is South Korea’s pledge to invest $150 billion in the U.S. shipbuilding industry, with an additional $200 billion allocated to “strategic investments” in various sectors.

The United States will lower Section 232 tariffs on South Korean cars, auto components, timber, and pharmaceuticals from 25% to 15%. In exchange, South Korea will and work together to tackle non-tariff barriers.

The two countries have also broadened their defense collaboration. South Korea has obtained U.S. consent to build nuclear-powered attack submarines, fulfilling a long-term strategic ambition. Furthermore, both sides agreed to

and the reprocessing of spent nuclear fuel, reflecting increased trust in nuclear technology partnerships. South Korea also committed to purchasing $25 billion worth of U.S. military hardware by 2030 and raising its defense budget to 3.5% of GDP, while the U.S. will for American forces based in South Korea.

President Lee Jae Myung of South Korea stressed that the investments would target commercially sound ventures, addressing local worries about potential financial risks. “Trade and security talks have now officially wrapped up,” Lee said,

for both economic growth and national defense.

At the same time, South Korea is taking steps to mitigate the effects of U.S. tariffs on its automotive sector. The government intends to increase subsidies for electric vehicles by more than 30% and introduce incentives for trading in older cars to encourage EV purchases domestically. These policies are designed to ease the financial burden on companies like Hyundai and Kia, which

due to tariffs imposed during Trump’s administration.

This agreement is part of a broader strategy to boost economic stability in the face of international competition, especially from China. South Korea’s $350 billion investment initiative is projected to generate jobs and strengthen U.S. manufacturing, while tariff reductions are expected to enhance the competitiveness of South Korean exports. The deal also supports U.S. efforts to secure supply chains and counter China’s regional influence.