ISTANBUL

South Korea and the United States on Friday signed a memorandum of understanding (MOU) formalizing Seoul’s $350 billion investment pledge in exchange for lower US tariffs, the South Korean Ministry of Trade, Industry and Resources said.

The MOU was signed electronically by South Korean Industry Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick, Yonhap News reported. The pact follows discussions during US President Donald Trump’s visit to South Korea last month, when both sides agreed on key trade terms.

Under the agreement, South Korea will invest $200 billion in cash installments, capped at $20 billion annually, along with $150 billion for bilateral shipbuilding cooperation. In return, Washington will reduce reciprocal tariffs on South Korean imports to 15%, as previously agreed in July.

Separately, the US on Thursday approved South Korea’s plans to build nuclear-powered submarines and pledged to collaborate closely with Seoul to meet the requirements of the shipbuilding project, including avenues for fuel sourcing.

Meanwhile, Washington and Seoul are holding talks on joint development of nuclear submarines, Bloomberg reported Friday, citing people familiar with the matter.

Currently, officials from both countries are considering Korean-led joint production, potentially across facilities in both nations, the report said. The scenario includes initially starting with US-class submarines, whose designs are well protected, before moving to South Korea’s own design.

There was no official statement from the two capitals regarding the claims made in the report.