South Korea’s parliament passed a bill on Thursday that will pave the way for the country to invest $350 billion in the US as part of a trade deal with President Donald Trump.
The deal, struck in November last year, was agreed in exchange for a reduction of US tariffs on South Korean exports from 25% to 15%.
But Trump threatened on social media in January that he would lift the rate back to 25%, saying the South Korean parliament was “not living up to its Deal with the United States” by failing to pass the investment bill.
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That warning led to the bill being expedited and put to a vote by lawmakers in parliament. It easily passed in a vote supported by the ruling Democratic Party and the main opposition People Power Party, by 226 votes to eight.
Seoul’s investment pledge includes $150 billion for shipbuilding cooperation and the remainder for strategic sectors such as semiconductors.
The bill’s passing comes after Washington launched new probes this week into alleged unfair trade practices by countries including South Korea, potentially opening the door to additional tariffs.
‘For the sake of our economy’
President Lee Jae Myung thanked MPs for passing the bill “for the sake of our economy and national security”.
“With the passage of the special bill, the institutional and legal foundation has now been established to implement the South Korea-US tariff agreement,” he added.
Earlier on Thursday, Lee’s office said Seoul would make efforts to ensure South Korea is “not placed at a disadvantage compared with other major countries” after Washington announced the trade practice probe.
The move came after the US Supreme Court struck down Trump’s global tariffs, saying he had exceeded his authority in invoking emergency economic powers to impose them on virtually all countries.
The US leader has since tapped a different law to impose a new 10% duty, and vowed to raise this level to 15%.
Trump’s sector-specific tariffs on goods like steel, aluminum and autos, however, remain unaffected by the Supreme Court’s ruling. South Korea’s export-reliant economy is closely tied to the trade of these goods and these aspects were unaffected by the court ruling.
AFP, with additional editing by Vishakha Saxena
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