Official says Seoul's US investment next year under tariff deal will likely be 'much smaller'
Choi Ji-young, center, a senior official of the Ministry of Economy and Finance, speaks to reporters at the Government Complex Sejong, Wednesday. Yonhap
Korea's investment in the United States in 2026 under a tariff deal will likely fall far short of the $20 billion annual cap, a senior government official said Wednesday, in apparent response to market concerns that a massive outflow of U.S. dollars may further weaken the already struggling Korean won.
"Because the investment has an annual cap of $20 billion at the request of the U.S., the market seems to think that the full $20 billion will be invested next year," Choi Ji-young, a senior official at the Ministry of Economy and Finance, told reporters.
The government does not expect the full amount to be immediately invested next year and that the actual amount would be much smaller, he added.
On Oct. 29, Seoul and Washington reached an agreement on the details of Korea's $350 billion investment pledge, made in exchange for lower U.S. tariffs. Under the final terms, the investment will consist of $200 billion in cash installments, with an annual cap of $20 billion and an additional $150 billion earmarked for bilateral cooperation in shipbuilding.
The ministry official noted factors such as special legislation that still needs to be passed and necessary processes in the U.S., including land acquisition and regulatory approvals, may significantly delay investment execution.
The remarks came amid mounting concerns over the weakening local currency and a potential decline in the country's foreign exchange reserves due to U.S. dollar outflows.
The Korean won has neared its weakest level against the U.S. dollar in 16 years in recent weeks despite a series of stabilization measures by authorities, prompting foreign exchange officials to issue a verbal intervention earlier in the day.
They also said the market would soon see the government's strong commitment and capacity for comprehensive policy execution to stabilize the local currency.
"Measures that the government has prepared and coordinated will begin to be implemented in earnest," Choi said.