South Korea’s parliament on Thursday passed a bill paving the way for $350 billion in US investments under a deal reached with Washington last year to avoid the steepest tariffs imposed by President Donald Trump.
Seoul and Washington finalised the agreement in November, under which South Korea pledged the massive investment package, including $150 billion dedicated to cooperation in the shipbuilding sector and the remainder targeted at strategic industries such as semiconductors.
The legislation’s approval comes a day after the United States launched new investigations into alleged unfair trade practices by dozens of countries, including South Korea, potentially opening the door to additional tariffs.
The investment deal was originally struck in exchange for a reduction in tariffs on South Korean exports from 25 percent to 15 percent under Trump’s broad tariff measures.
However, Trump wrote on social media in January that he would raise the tariff rate back to 25 percent, saying South Korea’s parliament was “not living up to its deal with the United States” by failing to pass the investment legislation.
His warning accelerated the bill’s consideration by lawmakers.
The measure was overwhelmingly approved, passing by 226 votes to eight with support from both the ruling Democratic Party and the main opposition People Power Party.
President Lee Jae Myung thanked lawmakers for backing the bill, saying the decision was made “for the sake of our economy and national security.”
“With the passage of the special bill, the institutional and legal foundation has now been established to implement the South Korea–US tariff agreement,” he added.
Earlier Thursday, Lee’s office said Seoul would work to ensure the country is “not placed at a disadvantage compared with other major countries” following Washington’s announcement of the trade practice investigations.
The latest developments come after the US Supreme Court struck down Trump’s global tariffs, ruling that he had exceeded his authority by invoking emergency economic powers to impose duties on nearly all countries.
Trump has since invoked a different law to impose a new 10 percent tariff on imports and has vowed to raise the rate to 15 percent.
However, sector-specific tariffs imposed during his administration on products such as steel, aluminum, and automobiles remain unaffected by the Supreme Court ruling.
AFP
