The U.S. government has received an official request from South Korea to lower tariffs on Korean-made cars, following the introduction of a special law in Seoul’s National Assembly tied to a 350 billion USD investment commitment to the United States.
South Korea’s Ministry of Trade, Industry and Energy sent a formal letter to the U.S. Secretary of Commerce on Wednesday. The letter asked that the current 25% tariff on Korean automobiles be rolled back to 15%, retroactive to November 1 — the same date the special investment-related law was submitted.
This request aligns with a Memorandum of Understanding (MOU) signed on November 14, in which both countries agreed to implement tariff reductions starting on the first day of the month in which the MOU implementation bill was submitted.
With the introduction of this bill, the stage is set for the U.S. to publish the relevant procedures in the Federal Register, paving the way for the retroactive application of reduced tariffs on automobiles and parts.
A spokesperson from the Ministry stated that the demand included urging the U.S. to publish the Federal Register notice quickly so that the reduced tariff rate becomes effective from November 1.
In a related development, Democratic Party floor leader Kim Byeong Ki introduced a special law to establish a temporary investment corporation to create the Korea-U.S. Strategic Investment Fund. This legislation follows the MOU signed by both governments on November 14.
The proposed law calls for the temporary establishment of the Korea-U.S. Strategic Investment Corporation, set to operate for up to 20 years. This entity will manage and oversee strategic investment resources, including a fund to support investments in the U.S. and foster shipbuilding collaboration.
Under the new law, the Ministry will form a Business Management Committee to evaluate the commercial viability, strategic implications, and legal aspects of U.S. investment projects. The Ministry will identify potential investment opportunities, which will then be reviewed and approved by an operating committee within the Korea-U.S. Strategic Investment Corporation.
South Korea’s Minister of Finance and Economy, now separate from the Ministry of Strategy and Finance, will chair the operating committee. Based on the committee’s deliberations, the Minister of Trade, Industry and Energy will communicate South Korea’s intentions regarding U.S. investment projects through the Korea-U.S. Consultation Committee.
If the U.S. Investment Committee recommends commercially viable investments to the President and a location is selected, the operating committee will have the final say in approving the allocation of investment funds.
To ensure transparency, the Korea-U.S. Strategic Investment Corporation will be required to report on its fund management and operations to the National Assembly at least annually.