Key Points
- South Korea’s planned $350 billion investment in the U.S. is unlikely to begin in the first half of 2026, finance officials say.
- The deal allows up to $20 billion per year in investment as part of tariff-reduction measures tied to broader economic cooperation.
- Delays reflect project lead times, currency market concerns and pending legislative and regulatory steps.
South Korea’s planned $350 billion investment package in the United States — part of a broader deal that trimmed U.S. tariffs on South Korean goods — is unlikely to begin in the first half of 2026, the nation’s finance minister said. The pact, reached in November 2025, allows Seoul to invest up to $20 billion per year in strategic sectors such as semiconductors, energy and AI under agreed limits designed to protect South Korea’s foreign exchange reserves.
Finance Minister Koo Yun-cheol told Reuters that large projects — particularly those involving nuclear energy or advanced manufacturing facilities — require lengthy planning, site selection, design and regulatory approvals, meaning initial capital outflows will be modest and won’t match the full investment commitments right away.
Seoul and Washington tied the investment pledge to tariff relief, reducing U.S. import duties on South Korean products from about 39% to around 15%. That framework aims to boost trade and deepen economic cooperation between the allies, but the timing of actual spending remains uncertain.
Part of the hesitation reflects ongoing currency market pressures: South Korea’s won has been weakening, nearing levels not seen since the 2007–09 global financial crisis, prompting officials to avoid large sudden outflows of capital that could worsen currency volatility.
The government has resisted imposing new foreign exchange curbs despite the currency weakness. Instead, it is pushing capital market liberalisation moves and aims for MSCI developed market status, which could attract global investment and support the won.
Delays also tie into legislative and regulatory hurdles: planned investment projects still require approval from South Korea’s National Assembly, and U.S. legal reviews of tariff rules could influence investment timelines.
Both Seoul and Washington have emphasised that the investment plan is long-term and will unfold gradually as economic conditions and project readiness allow. Analysts see this phased approach as prudent given global economic uncertainty and efforts to keep markets stable while advancing strategic cooperation.
