South Korea Signals Slower $20 Billion U.S. Investment Pace to Defend Weakening Won
A South Korean official stated the country's 2026 investment in the U.S. will likely be 'much smaller' than the $20 billion cap, a move to calm markets as the won hits a 16-year low.
A US$20 billion promise with a much smaller price tag for now. A senior South Korean official has stated that the country's actual investment in the United States for 2026 will likely fall far short of the annual cap, a move aimed at soothing market fears over the struggling Korean won, which has neared a 16-year low.
According to Yonhap, Choi Ji-young, a senior official at the Ministry of Economy and Finance, told reporters on Wednesday that market expectations for a full US$20 billion outflow next year are misplaced. "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, directly addressing concerns about a massive drain on U.S. dollar reserves.
Context of the $350 Billion Tariff Deal
The remarks came amid heightened anxiety over the weakening local currency. On October 29, Seoul and Washington finalized a deal involving a US$350 billion investment pledge from South Korea in exchange for lower U.S. tariffs. The agreement consists of US$200 billion in cash installments, with the annual US$20 billion cap, and an additional US$150 billion for cooperation in shipbuilding.
Procedural Hurdles Cited for Delay
Choi pointed to several factors that could slow the investment's execution, including special legislation that still needs to pass in South Korea and necessary processes in the U.S. like land acquisition and regulatory approvals. The official's statement serves as a form of verbal intervention, reinforcing a message from foreign exchange authorities earlier in the day. "Measures that the government has prepared and coordinated will begin to be implemented in earnest," Choi said, signaling a stronger push to stabilize the won.
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