US Investment Project No. 1

A term referring to the first individual project pursued among the $350 billion US investment package created through the 2025 Korea-US tariff and investment negotiations.

US Investment Project No. 1

Overview

US Investment Project No. 1 (對美投資 1號, daemituchaek 1-ho) is a term referring to the first individual project to be pursued among the large-scale US investment package created as a result of the 2025 Korea-US tariff and investment negotiations. Because it is the first case that will determine whether the $350 billion investment pledge moves beyond a written agreement into the actual execution stage, it is treated as a symbolic matter in which the interests of the Korean government, the US administration, and major domestic corporations are simultaneously at stake. As a matter where trade, foreign exchange, and industrial policy intersect at a single point, it has become a keyword repeatedly cited in economic news.

Main Details

Background: The 2025 Korea-US Tariff and Investment Negotiations

In 2025, the second Trump administration imposed reciprocal tariffs on major trading partners and adopted an approach of partially lowering tariff rates for countries that came to the negotiating table. Korea reportedly agreed, at the end of negotiations, to promise $350 billion in investment in the United States in exchange for managing tariffs on exports to the US at around the 15% level. This package is composed largely of two pillars. One is $200 billion in cash-type direct investment, and the other is $150 billion in cooperation in strategic industries such as shipbuilding, energy, and semiconductors. The question was within what legal and institutional framework this pledge would be executed, and what was discussed as the resulting product was the so-called "Special Act on US Investment" (Special Act on Korea-US Strategic Investment and Industrial Cooperation).

Operating Structure of the Investment Package

The core of the agreement is the structure in which projects in the United States are pursued with Korean funds, but the US side holds considerable discretion in choosing which projects to select. The government has been examining a plan to create an execution channel in the form of a separate strategic investment corporation or fund to manage the funds, and to set the principal recovery period and profit-sharing ratio for each project. As a structure in which a substantial portion of investment returns accrues to the US side after the recovery period has been discussed, debate has continued in Korea over whether this is an "investment" or a "cost."

Nature of Project No. 1

US Investment Project No. 1 is not a simple individual factory construction but carries the meaning of a signal flare demonstrating the will to execute the entire package. The likely fields cited have been shipbuilding and maritime (acquisition and expansion of US shipyards), energy (gas and power infrastructure), and advanced and materials industries such as semiconductors, batteries, and steel. Korean companies' investment in US shipyards, the expansion of EV and battery plants in the United States, and steel projects pursued in Louisiana and elsewhere have been mentioned as candidates, and the concrete selection of the No. 1 project is described as a procedure achieved through the interlocking of working-level consultations between the two governments and corporate investment decisions.

Economic Ripple Effects and Issues

The biggest issue is funding. The $350 billion is a scale comparable to a substantial portion of Korea's foreign exchange reserves, and concerns were raised that executing the full amount in cash over a short period could cause a decline in the value of the won (a rise in the exchange rate) and instability in the foreign exchange market. Accordingly, arguments emerged that an annual execution cap should be set, or that safeguards such as an investment recovery structure and a currency swap should be pursued in parallel. In addition, concerns from industry that domestic facility investment and employment could shrink as domestic investment funds flow overseas, political conflict over parliamentary ratification and budget deliberation, and controversy over trade sovereignty regarding the US side's discretion in project selection have also been raised. Conversely, there is also an expectation that securing production bases in the United States could circumvent tariff barriers and improve access to the local market.

Latest Trends

Since 2024, the trade environment has been reorganized around tariffs, and in 2025 it was reported that Korea reached a broad framework agreement trading a 15% tariff ceiling for a $350 billion investment pledge. Since then, the focus has shifted to implementation of the agreement. The government began enacting the Special Act on US Investment, organizing an execution body, and preparing project selection criteria, while the National Assembly discussed the scale of funds, control mechanisms, and the profit-and-loss sharing structure. With shipbuilding, energy, and semiconductors competing over the selection of the No. 1 project, the two governments continued working-level consultations and coordinated the timing of the announcement. In the market, the prevailing view is that the field and scale of the No. 1 project will determine the speed and direction of the entire package, and the exchange rate, foreign exchange reserves, and whether domestic investment shrinks are cited as key monitoring indicators. As of the end of 2025, the detailed implementation plan and the final contours of the No. 1 project are still at a stage of moving back and forth between confirmation and adjustment, and a multi-layered negotiation structure involving trade authorities, corporations, and the National Assembly continues.