South Korean auto and shipbuilding stocks jumped on Thursday following a trade agreement between Seoul and Washington, which was declared in July.
Hanwha Ocean rose to 14.9 percent, and Samsung Heavy Industries increased by 8.33 percent at its highest point. Therefore, Firstec, a defense product maker, climbed up to 9.7 percent as well.
The automakers Hyundai and Kia witnessed a profit growth of 12 percent and 9 percent, respectively.
The agreement, outlined after a meeting between South Korean President Lee Jae Myung and U.S. President Donald Trump, sees U.S. tariffs reduced on goods produced in South Korea in exchange for a $350 billion investment commitment by Seoul, a move that will restructure trade and defense relations between the two allies.
In the new agreement, American tariffs on South Korean exports will be reduced to 15 percent compared to the previous “tariff letter” rate of 25 percent.
South Korea’s plan to invest $350 billion was said to consist of $200 billion in direct investment and $150 billion in shipbuilding cooperation.
South Korea’s Chief Policy Advisor, Kim Yong-beom, stated that the 200 billion investments would be limited to $20 billion per year.
In a post on Truth Social, U.S President Donald Trump has added that he has approved to construction of a nuclear submarine in “the Philadelphia Shipyards,” which would be the first nuclear submarine of Seoul.
South Korean shipbuilder Hanwha had invested $5 billion into the Philly Shipyards in August as part of Seoul’s earlier promise to invest $150 billion.
In a statement, Hanwha Chief Strategy Officer Alex Wong said, “As President Trump and President Lee make shipbuilding a central plank in the U.S.-Korea alliance, Hanwha stands ready to support with our advanced shipbuilding scale.”
Yonhap of South Korea added that a fact sheet that will include both trade and security aspects of the agreement between Seoul and Washington will be issued in the forthcoming days.
