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Global banks say U.S.-Korea summit eased uncertainties, likely to boost Kospi

Published: 31 Oct. 2025, 17:28

The national flags of the United States and Korea are hoisted at the venue of the U.S.-Korea summit meeting held on the sidelines of the Asia-Pacific Cooperation Economic (APEC) gathering in the southeastern city of Gyeongju on Oct. 29. [YONHAP]

Global investment banks assessed Friday that the trade deal reached between Seoul and Washington this week has eased uncertainties and is expected to provide upward momentum to the Korean stock market.

On Wednesday, U.S. President Donald Trump agreed to reduce "reciprocal" tariffs on Korea to 15 percent and also lower U.S. tariffs on Korean auto exports to 15 percent.

The two countries also agreed to split Seoul's promised $350 billion investment into $200 billion in cash, to be paid in installments with an annual cap of $20 billion, and a separate $150 billion fund dedicated to supporting the U.S. shipbuilding industry.

According to a report published by the Korea Center for International Finance (KCIF), Morgan Stanley has raised its forecast for Korea's GDP next year from 1.5 percent to a maximum of 1.7 percent.

The New York-based investment bank said the Lee-Trump summit helped eliminate uncertainties in the country's economy and foreign exchange market.

"The $20 billion annual cap on Seoul's investment pledge has reduced concerns over large-scale dollar outflows," the bank was quoted as saying in the report. "U.S. auto tariff reduction will also help restore the price competitiveness of Korean cars."

Goldman Sachs Group estimated that changes to U.S. auto tariffs will reduce the cost burden stemming from U.S. tariffs by about 40 percent for Hyundai Motor and its sister company Kia.

Citigroup, however, noted that the planned direct U.S. investments by local auto, semiconductor and battery companies could put downward pressure on the local currency.

Yonhap