Korea’s U.S. investment jumps 55% after tariff deal

(Yonhap)

South Korea’s outbound foreign direct investment rebounded sharply in the third quarter, driven by a surge in investment into the United States following the conclusion of tariff negotiations.

According to the Ministry of Economy and Finance on Tuesday, Korea’s overseas direct investment reached $16.06 billion in the third quarter, up 9.3 percent from $14.69 billion a year earlier, marking the first on-year increase in three quarters since the fourth quarter of last year. Overseas direct investment refers to cases in which Korean residents acquire at least a 10 percent stake in a foreign corporation to participate in management.

By sector, financial and insurance services accounted for $7.97 billion, followed by manufacturing with $4.21 billion, information and communications technology with $760 million, and wholesale and retail trade with $690 million. Financial services and manufacturing, which had declined in the first half of the year, rebounded by 26.5 percent and 5.5 percent, respectively, leading the overall recovery.

Regionally, investment rose mainly in financial services and manufacturing in North America, and in ICT and wholesale and retail in Asia, while Europe saw a decline largely driven by financial services.

By destination, the United States ranked first with $5.97 billion, followed by the Cayman Islands with $1.78 billion and Luxembourg with $1.49 billion. Investment into the U.S., Korea’s top destination, jumped 55% from a year earlier, supported by a base effect after a sharp 43.4 percent drop in the third quarter of last year and easing uncertainty following the tariff agreement.

Kim Byung-kee, floor leader of the ruling Democratic Party, said on Monday that Korean companies are concentrating their efforts on U.S. investment to secure future industrial competitiveness.

The upward trend is expected to continue into the fourth quarter after Korea Zinc announced plans to invest around 10 trillion won ($6.80 billion) to build a critical minerals smelting facility in the United States, a move policymakers see as strengthening the economic security alliance between the two countries.