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DP submits special bill to manage strategic investments with U.S.

Published: 26 Nov. 2025, 13:12 Updated: 26 Nov. 2025, 18:28

Democratic Party floor leader Kim Byung-kee, right, speaks during a Supreme Council meeting at the National Assembly in Yeouido, western Seoul, on Nov. 26. [YONHAP]

The Democratic Party (DP) on Wednesday submitted a special bill to manage strategic investments with the United States, following the memorandum of understanding (MOU) signed between the two countries on Nov. 14.

DP floor leader Kim Byung-kee submitted the bill, which has the official Korean title “Special Act on Strategic Investment Management between Korea and the United States.”

The proposed legislation outlines a framework to support the MOU's $350 billion investment package, including the establishment of a Korea-U.S. strategic investment fund and the temporary creation of a Korea-U.S. strategic investment corporation. The corporation would be established with 3 trillion won ($2.05 billion) in capital, funded by the Korean government, and would operate for 20 years before being dissolved.

With the bill’s submission, the conditions were met for the retroactive application of the tariff cut on automobiles and auto parts — from 25 percent to 15 percent — as of Nov. 1.

The final step is publication in the U.S. Federal Register, after which the lowered rate would take effect immediately.

Following the bill’s submission, Korea’s Ministry of Trade, Industry and Resources sent an official letter to the U.S. secretary of commerce notifying the start of the legislative process. The ministry also requested prompt publication of the retroactive tariff cut in the Federal Register.

The Korean government had previously agreed with the United States that submitting legislation to establish a fund to implement the MOU on tariff concessions and investment would allow the tariff reduction to be backdated to the first of that month.

Funding for the initiative would come from sources such as returns on foreign exchange reserves managed by the Bank of Korea and government-guaranteed overseas bond issuances. The program will provide up to $20 billion per year for U.S.-bound investment and financial support for shipbuilding collaboration. The fund will be divided into a $200 billion account for investment in the United States and a $150 billion account for shipbuilding cooperation.

Investment decisions will be made by an operations committee, chaired by the minister of economy and finance, and a project management committee, led by the industry minister. When the United States proposes a candidate project, the project committee will review its commercial viability, strategic value and legal considerations. The operations committee will then vote on whether to invest. Projects proposed by Korea will follow the same review process. Final projects will be coordinated with the United States through a bilateral consultation body.

Safeguards include an annual remittance limit of $20 billion and phased disbursement based on project progress. The size and timing of disbursements may be adjusted if foreign exchange market volatility is expected. Only projects with proven commercial viability will be recommended.

The law will also include prior reviews for potential conflicts with Korean domestic laws. The Korean government will consult with the U.S. side to ensure Korean companies and personnel are prioritized as vendors, suppliers and project managers. Topics for negotiation also include U.S. government support such as land, power, water and expedited regulatory approvals. If investment recovery within 20 years proves difficult, the profit-sharing ratio may be adjusted.

“With the bill submitted, the final condition for retroactive tariff reduction has been met,” a Trade Ministry official said. “Once published in the Federal Register, the burden on Korean exporters will be significantly eased.”

While the DP swiftly submitted the bill in accordance with the retroactive application agreement, it stated that the bill would undergo a thorough review without a preset timeline.

“This bill goes beyond fulfilling the bilateral MOU — it’s a special act in the interest of the nation,” Kim said. “The National Assembly will actively support efforts to turn the diplomatic success of the tariff agreement into real economic gains.”

Update, Nov. 26: Added details about the bill submission.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM WON [[email protected]]