[Econ & Biz] Key trade agenda ahead of S. Korea-U.S. summit on Aug. 25

With just about 10 days to go until the August 25th South Korea-U.S. summit, attention is now on the trade issues yet to be fully resolved.

For more on this, we have our economics correspondent Moon Ji-young in the studio with us.

Good to have you, Ji-young.

Korea's investment pledge is at the top of the trade agenda. What's its status, and are the two sides aligned on investment destinations?

The highly anticipated focus is on finalizing the details of Korea's 3-hundred-50 billion U.S. dollar investment pledge.

We expect discussions on specific investment sectors and implementation timelines.

Around 150 billion is earmarked for the "MASGA" project, a joint shipbuilding initiative named by the Korean government, with the remainder likely to be invested more broadly in critical sectors like chips and batteries.

Given that Korea itself named the initiative, shipbuilding is clearly a sector Korea is strongly pushing in these negotiations.

The Korean Trade Ministry emphasized on Thursday that the Korea-U.S. shipbuilding cooperation means new opportunities for Korean shipyards in the U.S., rather than job outflow.

However, there have been complexities when it comes to cooperation.

This is what one expert said about the situation.

"One of the problems with the U.S. shipbuilding industry is that right now they are protected by the Jones Act and that means foreign investment into the U.S. shipbuilding sector is restricted But if they do open up those markets, if they do open up, say imports of shipbuilding related parts, intermediate parts and raw material, then I think this will be one of the few areas where both sides can benefit."

To ensure its success, the Korean government plans to launch a consultative body involving relevant ministries to support this vital shipbuilding cooperation.

Yet, the two countries notably hold differing views on this very investment plan.

While the U.S. asserts the investment plan falls under its president's direction, Korea clarifies that the U.S. dictating all investment destinations is merely "political expression."

On these contrasting views, here's what the same expert had to say.

"President Trump will probably push very hard for Korea to accept his interpretation rather than the Korean or Japanese interpretation. And it will be a very tough pressure because Trump will be negotiating not just for the Korean deal, but he's probably going to use the results from the Korean deal and reinterpretation as a model for Japan, European Union and other countries as well."

Another critical issue is the U.S.'s proposed 100 percent tariffs on foreign-made semiconductors. What are the concerns, and what will the overall impact be?

These potential chip tariffs could have far-reaching implications, especially for the Korean economy.

Semiconductors are Korea's largest export item, accounting for over 20 percent of its total exports.

Given this reliance, the key uncertainty lies in whether the Most Favored Nation treatment promised by the U.S. will be applied.

Additionally, there's the question of how broadly the U.S. will define the scope of semiconductor items subject to these tariffs.

However, Korea's chip giants have found some relief, as the U.S. announced that companies committed to building chip facilities in the U.S. during the Trump administration's term could be exempt from the proposed 100 percent tariff.

This comes as Samsung has already invested in two fabrication plants in Texas, while SK hynix plans to open an advanced chip packaging and AI R&D facility in Indiana.

Chip tariffs have a significant impact not only on exporters to the U.S. but also on the American economy.

"In terms of like this meaning of the tariffs, obviously on our daily lives are completely depending on the electronics, such as smartphones, TVs, and internet-based machines. So, in that case, semiconductors are going to be extremely important. Therefore, the prices of consumers and also producers actually will eventually go up so the most important effect is going to come through the inflation."

Regarding non-tariff barriers, including the fine-tuning of agricultural market access, what can we expect?

While the U.S. calls for "historical market access" for its agricultural products like rice and beef, South Korea has firmly rejected any further opening, emphasizing that "there will be no additional market access."

This firm stance sets the stage for a critical discussion on agricultural market access at the upcoming summit.

"Other countries know that if you push Korea to open beef and rice sector, they know that because this is so politically sensitive in Korea that Korea will offer opening in other areas not to get the other side to open beef and rice markets. So, at the very beginning you should expect the United States to push very hard to open Korea's beef and rice sectors but later they may be satisfied with gains in other sectors that are worth more to the United States than the rice and beef markets."

Beyond these points, further non-tariff barriers like Google's high-precision map data export will be crucial issues to monitor at the upcoming summit.