South Korean auto and shipbuilding stocks rose on Thursday after South Korea and the United States finalized a trade deal announced in July.
Hanwha Ocean soared as much as 14.9% and ended the session 6.9% higher, while Samsung Heavy Industries, which peaked 8.33% higher, closed 1% higher. Defense products maker Firstech rose 9.7% to close 1.7% higher.
Automakers Hyundai and Kia Motors posted gains of about 12% and 9%, respectively, before equalizing profits. Both automakers ended up with 2.71% and 0.35%, respectively.
The agreement, detailed after talks between President Lee Jae-Myung and US President Donald Trump, includes lower US tariffs on South Korean goods in exchange for $350 billion in investment commitments from South Korea, a move that could reshape trade and defense ties between the two allies.
Under the new terms, U.S. tariffs on South Korean exports will be reduced to 15% from the previous “tariff letter” rate of 25%. South Korea’s $350 billion investment pledge reportedly includes $200 billion for direct investment and $150 billion for shipbuilding cooperation.
Kim Yong-beom, South Korea’s chief policy adviser, was reported to have said that the $200 billion investment would be limited to $20 billion a year.
President Trump also said in a post on Truth Social that he had approved South Korea to build a nuclear submarine at the “Philadelphia Shipyard.” This will be Seoul’s first nuclear-powered submarine.
South Korean shipbuilder Hanwha had invested $5 billion in the Philadelphia shipyard in August as part of an earlier pledge by the Seoul government to invest $150 billion.
“As Presidents Trump and Lee make shipbuilding a central pillar of the U.S.-South Korea alliance, Hanwha stands ready to support with advanced shipbuilding scale,” Alex Wong, Hanwha’s chief strategy officer, said in a statement.
South Korea’s Yonhap news agency also reported that a fact sheet covering both the trade and security elements of the Seoul-Washington agreement will be released within the next few days.
