US pressures South Korea over $200 billion investment, warns 15% tariff could rise

The United States has intensified pressure on South Korea to accelerate a $200 billion US investment plan within a broader $350 billion commitment, while Seoul tries to preserve a 15% tariff ceiling and prepare for possible additional Section 301 duties. Industry Minister Kim Jung-kwan flew to Washington on an unscheduled trip on the morning of the 16th, a day after former Trade Negotiation Headquarters chief Yeo Han-koo was dismissed effective midnight, leaving Kim to handle both investment implementation and tariff defense directly. South Korean officials are working with Washington on selecting the first investment project within the year. A 6.4GW gas combined-cycle power plant in Texas, with estimated costs of $19.8 billion, is under serious consideration, though no final decision has been made and Seoul plans to review its viability through the Korea-US Strategic Investment steering committee before consulting US officials. Washington has been urging faster announcements and execution of projects, including through repeated emails from the US Commerce Department. The tariff issue has become more urgent because the US is expected to release the results of its Section 301 supply glut investigation as early as late this month. South Korea is already facing a 12.5% forced-labor-related tariff, raising concern that further action could push overall tariffs above the 15% level agreed last year, even though Seoul says the two sides share an understanding that tariffs should not exceed that ceiling. Officials also cannot rule out the possibility that the US could link the pace of investment implementation to tariff decisions. President Donald Trump previously warned in January that tariffs on South Korean goods, including automobiles, could rise from 15% to 25%. Kim’s trip also comes amid political and administrative disruption after Yeo’s abrupt dismissal. The government has said the move was unrelated to Korea-US tariff negotiations, while Yeo rejected allegations against him and warned that legal action could follow if false information continued to spread. Until a successor is named, the Ministry of Trade, Industry and Energy has put an emergency system in place centered on Deputy Minister for Trade Park Jung-sung to keep negotiations running.

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