Description: South Korean trade representatives met with US President Donald Trump in Washington where they managed to conclude a trade deal equivalent to the ones the US introduced with the EU and Japan. Imports in the US from South Korea would be taxed at 15% and a joint investment fund of $350 billion would also be established. Out of the $350 billion expected to be invested by South Korea in the US, $150 billion were planned as direct investment into the shipbuilding industry which currently thrives in South Korea. The White House also announced that South Korean leader, Lee Jae Myung and US President Donald Trump will hold a leaders summit in two weeks’ time where the official conclusion of the trade deal would be introduced. The deal was praised by the South Korean leader, stating that a crucial obstacle in his country’s partnership with the US has been surpassed. In line with the trade agreement, Samsung concluded a $16 billion chip supply deal with Tesla, while LG Energy Solution also agreed a $4.3 billion deal to supply Tesla with energy storage capabilities.
Impact: South Korea managed to secure favorable trade agreement and preserve stable relations in their strategic partnership with the US. The country managed to defuse bilateral tensions such as the threat of US troop withdrawal from the country and the previously announced 25% tariffs on their exports. The US might exploit the joint investment fund focused on increasing shipbuilding capacities to rapidly develop the stagnant industry domestically and use it as a regional hub to support its role in the AUKUS defense partnership with the UK and Australia. The agreement also largely supports US ambitions for chip and semiconductor development, since South Korea’s domestic manufacturing capabilities have significantly increased, and directly impacts the US – China battle for dominance in the digital and technological sectors.