South Korean President Lee Jae Myung stated on Friday that the US has agreed to help Seoul’s long-held pursuit of nuclear-powered submarines and expanded authority over nuclear gasoline processing as the 2 international locations launched the ultimate outcomes of their commerce and safety settlement signed final month.
In a Joint Truth Sheet launched on Friday, the 2 governments additionally dedicated to exploring measures that will allow not solely US business vessels, but additionally US Navy ships to be inbuilt South Korea, a possibility that might generate a market price a number of billion {dollars} yearly.
“The US has given approval for South Korea to construct nuclear-powered assault submarines. The US will work intently with South Korea to advance necessities for this shipbuilding undertaking, together with avenues to supply gasoline,” the Joint Truth Sheet states.
Lee describes the settlement as “a really significant development.”
Establishing nuclear submarines and US Navy ships is a part of South Korea’s $150 billion dedication to revitalizing the US shipbuilding trade underneath the Make American Shipbuilding Nice Once more (MASGA) undertaking.
The funding will encompass direct funding, cost gurantees and ship financing for shipyard modernization, workforce growth and provide chain resilience.
“These initiatives will improve the variety of US business ships and combat-ready US navy vessels as shortly as potential, together with the potential building of US vessels within the ROK,” the Joint Truth Sheet states.
Shipbuilding trade officers stated that Korean yards might turn out to be viable companions in building and upkeep of US ships because the US shipyards face power labor shortages and output constraints.
Nonetheless, main constraints stay. US legislation restricts the development of sure Navy vessels to home yards.
In return for Washington reducing tariffs on Korean merchandise to fifteen% from 25%, Seoul will make investments a further $200 billion on the earth’s largest economic system, bringing whole deliberate Korean funding within the US to $350 billion.
South Korean Commerce Minister Kim Jung-kwan emphasised the pledged investments will give attention to “commercially viable initiatives” that make sure the restoration of principal. Funding targets are scheduled to be chosen by January 2029 earlier than the top of President Trump’s second time period.
Underneath the settlement, the US will cut back tariffs on cars and auto elements from 25% to fifteen%, whereas tariffs on oilfield tools will stay at 15%.
The tariff discount is predicted to decrease annual prices at Hyundai Motor Co. and Kia Corp., South Korea’s two largest carmakers, by greater than 3 trillion gained ($2.2 billion), in line with trade analysts.
Tariffs on passenger and cargo plane, now at 15%, will even be lowered.
South Korea will even be handled no much less favorably than every other nation in future semiconductor tariff preparations.
DEFENSE SPENDING
The Korea-US Joint Truth Sheet contains South Korea’s plan to supply $33 billion in complete help for US Forces Korea over the subsequent decade, marking the primary time such a determine has been publicly disclosed.
The help bundle is designed to adjust to South Korean authorized necessities and encompasses each direct and oblique contributions, together with protection cost-sharing underneath the Particular Measures Settlement (SMA), land grants and tax incentives.
The actual fact sheet additionally confirms that South Korea will buy $25 billion in US navy tools by 2030.
South Korea plans to boost protection spending to three.5% of GDP “as quickly as potential” in accordance with home authorized necessities, which Trump welcomed. Its protection spending at present stands at about 2.32% of GDP.
“Throughout a bilateral assembly (with Trump), we now have made clear our willpower to take the lead within the protection of the Korean Peninsula by means of stronger protection capabilities and wartime operational management switch,” Lee stated.
Primarily based on estimated nominal GDP development of three.4% and annual protection finances will increase of round 7.7%, Seoul is projected to succeed in the three.5% goal by 2035.
In the meantime, Lee stated that President Xi Jinping has agreed to proceed strengthening financial cooperation and exchanges with Seoul and to “take time to deal with elements that hinder cooperation.”
“Rejecting international locations with completely different views is a really silly act,” Lee famous.
