South Korea Hits Pause on $350B US Investment

By Staff, Agencies

Finance Minister Koo Yun-Cheol said South Korea’s $350 billion US investment is unlikely to start in H1 2026 due to a weak won and market uncertainty.

A report by Reuters on Friday revealed that the delay offers temporary relief to Seoul’s currency markets, as the investment plan had raised concerns about significant dollar outflows, which could further weaken the won.

Under a November 2025 trade agreement, South Korea pledged to invest $350 billion in key US sectors in exchange for the United States rolling back tariffs imposed during President Donald Trump’s term.

According to the report, both nations agreed to cap annual dollar outflows at $20 billion, but Koo said the investment is unlikely to start early in 2026, with initial outflows expected to be much smaller.

The South Korean won has been hovering near 16-year lows, trading at 1,473.8 to the dollar as of Friday, after weakening more than 2% since the start of the year.

Koo acknowledged the currency market strain. "There is depreciation pressure in the foreign exchange market that is somewhat bigger than we thought," he said, reported Reuters.

He warned traders against testing the government and vowed quick market-stabilizing measures, while the US noted South Korea’s efforts to curb the won’s fall.

Although South Korea plans to implement the investment package “as soon as possible,” Koo noted that uncertainty over an expected US court ruling on Trump-era tariffs could influence the timeline.

The government will also seek parliamentary review of a proposed bill to establish a special fund to support the investment, starting in February.

No specific projects have been confirmed, but US Commerce Secretary Howard Lutnick has indicated that nuclear power plants could be among the key focus areas.

Despite government measures, the won hovers near 1,500 per dollar, driven partly by Korean investors buying overseas stocks amid a widening US–South Korea interest rate gap.