Kim Says South Korea to Name First US Investment Project in September, Keep 15% Tariff

Energy Investment Reaffirmed

Shift to Semiconductors Ruled Out

South Korea will designate an energy-sector project as its first investment initiative in the US in September, Industry Minister Kim Jung-kwan said after returning from a trip to Washington. His remarks came as the US presses Seoul to speed up investment by threatening higher tariffs. They also underscore the government’s plan to stick with commercially viable energy and infrastructure projects despite US pressure to build semiconductor plants there. Kim also indicated discussions are proceeding on the basis of maintaining the 15% reciprocal tariff level agreed by the two countries last year.

Kim spoke to reporters after arriving at Incheon International Airport on Aug. 20 following talks with US Commerce Secretary Howard Lutnick and other officials. Over two days of negotiations with Lutnick, the two sides resolved many issues that working-level officials had been unable to settle, he said. They agreed to seek a final compromise in a video conference next week. He added that the first US investment project will be announced in September, later than the previously discussed late-August to early-September time frame.

Kim also reaffirmed that energy will remain at the center of the investment plan after controversy over Lutnick’s reported comment that he wants Samsung Electronics Co. and SK Hynix Inc. to build production facilities in the US. Asked whether the investment could be shifted to semiconductors or other sectors, Kim said changing course now would make it impossible to meet the schedule. Discussions are being actively focused on the energy sector, he added. The government previously picked the $19.8 billion Encinal gas combined-cycle power plant project in Texas as the first US investment initiative and is in final-stage talks with the US Commerce Department.

Kim said Seoul is seeking to preserve the 15% reciprocal tariff level previously agreed by the two sides, despite US pressure that tariffs could rise further if South Korea does not accelerate its investment plans. Referring to his meeting with US Trade Representative Jamieson Greer, Kim said the two sides share an understanding on the 15% upper limit discussed last year. He added that the US is set to announce the results of its Section 301 trade investigation in early September.

Kim Ri-an, Korea Economic Daily reporter knra@hankyung.com