South Korean lawmakers pass law to manage Seoul's pledge of $350 billion in US investments

South Korea’s National Assembly on Thursday passed a landmark law to implement Seoul’s pledge to invest $350 billion in the United States , fulfilling a key part of a broader trade deal aimed at easing U.S. tariff pressure. The law, approved by a large bipartisan majority, establishes a new state‑run investment corporation with a strategic investment fund to manage and select projects in priority sectors including semiconductors, pharmaceuticals, artificial intelligence, critical minerals, energy, quantum computing and shipbuilding. It is expected to take effect in about three months.

The legislation codifies the deal struck last year between South Korean President Lee Jae‑myung and U.S. President Donald Trump, under which Seoul agreed to invest $200 billion in strategic industries and $150 billion in shipbuilding cooperation in return for Washington reducing reciprocal tariffs on Korean imports from 25 percent to 15 percent. The program also caps annual investment at $20 billion to help protect South Korea’s foreign currency reserves.

South Korean officials have said that investments will be subject to commercial viability and foreign exchange market considerations , with detailed project assessments overseen by a committee co‑chaired by the industry and finance ministers and coordinated with U.S. trade authorities.

The vote follows contentious negotiations in Seoul, where opposition lawmakers had criticized the bill for insufficient legislative oversight and raised concerns about the economic and currency impacts of fulfilling such a large investment pledge. Some critics argued that the measure could entangle South Korean firms in U.S. political priorities, while others framed the dispute as a broader reaction to rising U.S. protectionism and Middle East conflicts that have heightened economic instability.

Thursday’s vote came as Washington launched a Section 301 investigation into “unfair” manufacturing and overcapacity in South Korea and 15 other economies, including China, Japan, and the EU, which could lead to new tariffs if violations are found. South Korean officials had sought to avoid inclusion, emphasizing diplomatic efforts to address U.S. concerns, but the probe adds pressure on Seoul to maintain trade cooperation. While earlier U.S. tariff threats weighed on decision‑making, Korean industry leaders said swift passage of the investment law would likely prevent rates from exceeding 15 percent. Amid these dynamics, Seoul is exploring additional investment areas under the $350 billion program, including potential U.S. nuclear projects. The vote is a major milestone in U.S.–South Korea economic ties, though trade tensions and structural investigations continue to pose challenges to balancing market pressures, oversight, and long-term stability.