^{Photo: KED Global}

Markets React Strongly to New U.S.-Korea Trade Pact

South Korean markets soared on Thursday following the official ratification of a long-awaited trade deal between Seoul and Washington, first announced in July. The agreement — which includes a $350 billion investment pledge from South Korea and significant tariff reductions by the U.S. — has reignited investor confidence across key industries, especially automotive and shipbuilding.

Shares of Hanwha Ocean skyrocketed 14.9%, while Samsung Heavy Industries surged 8.33% at its peak. In the defense manufacturing space, Firstec rose 9.7%, reflecting optimism over the growing military cooperation between the two allies.

Automotive giants Hyundai Motor and Kia Corp also saw their stock prices climb by 12% and 9% respectively, signaling renewed investor enthusiasm for South Korea’s export-led industries.

Key Details of the $350 Billion Investment

The finalized trade deal outlines a sweeping commitment by Seoul to invest $350 billion in the United States over the coming years. According to Kim Yong-beom, South Korea’s chief policy advisor, $200 billion of this amount will come from direct industrial investment, while $150 billion will be channeled into shipbuilding and defense collaboration.

The agreement will also see the U.S. cut tariffs on South Korean exports — lowering rates from 25% to 15% — giving Korean automakers and manufacturers a major competitive advantage in the American market. The $200 billion in direct investment is set to be distributed at $20 billion per year, ensuring steady economic cooperation through the next decade.

Boost to Defense and Shipbuilding Ties

In a separate but related announcement, U.S. President Donald Trump revealed via Truth Social that Washington has authorized South Korea’s first nuclear-powered submarine, which will be constructed at Philadelphia Shipyards.

The project builds upon Hanwha Ocean’s $5 billion investment in the shipyard earlier this year, part of Seoul’s broader $150 billion commitment to strengthening naval and shipbuilding ties with the U.S.

“Shipbuilding is becoming a cornerstone of the U.S.-Korea alliance,” said Alex Wong, Chief Strategy Officer at Hanwha Ocean. “Hanwha is ready to leverage its world-class expertise to advance joint shipbuilding and defense capabilities.”

Strategic and Economic Implications

The new deal represents more than just a trade milestone — it signals a deepening of economic and defense integration between two major allies. With South Korea’s exports already valued at over $680 billion annually, the tariff reduction is expected to boost trade volumes significantly in sectors such as automobiles, heavy industry, and electronics.

Analysts predict that the combined impact of tariff relief and large-scale investment will add between 1.2% and 1.8% to South Korea’s GDP over the next three years.

Moreover, the agreement may reshape the global shipbuilding landscape, where South Korea already holds nearly 40% of market share alongside China. The U.S.-Korea collaboration could potentially strengthen supply chain resilience in naval construction and maritime defense.

Looking Ahead

South Korea’s Ministry of Trade, Industry and Energy has stated that a comprehensive fact sheet detailing the trade and defense components of the agreement will be released in the coming days.

With both governments emphasizing industrial cooperation and security alignment, Thursday’s developments mark a pivotal turning point — one that not only lifted stocks but may also redefine the U.S.-Korea economic alliance for decades to come.