South Korea’s Cabinet on Tuesday approved the enforcement decree for a special law tied to the country’s $350 billion investment pledge to the US, clearing the way for its implementation later this month, according to local media.
The decree follows the Special Act for Korea-US Strategic Investment Management, passed by the National Assembly in March, which is set to take effect on June 18, Yonhap News reported citing the Finance Ministry.
The investment package was agreed between Seoul and Washington in October last year as part of a broader trade agreement under which South Korea pledged to invest in the US in exchange for reduced US tariffs.
The plan includes $150 billion for shipbuilding cooperation and $200 billion for projects in other strategic sectors.
According to the Finance Ministry, the enforcement rules set out criteria for determining the “commercial viability” of proposed projects in the US.
A project will be considered viable if expected returns allocated to South Korea are sufficient to cover both principal and interest over the investment period.
Interest calculations will be based on 20-year US Treasury yields plus an additional spread agreed between Seoul and Washington.
A special committee led by the trade minister will review and approve projects, while a new Korea-US Strategic Investment Corporation will be established with a 20-year mandate and 2 trillion won ($1.3 billion) in initial capital.
Earlier this year, US President Donald Trump warned that reciprocal tariffs on Korean exports could rise again to 25% from 15%, citing delays in South Korea’s legislative procedures required to advance the trade arrangement.
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