South Korean auto and shipbuilding stocks rallied Thursday after Seoul and Washington finalized a trade deal announced back in July.
Hanwha Ocean spiked as much as 14.9% while Samsung Heavy Industries climbed 8.33% at its peak. Defense product maker Firstec also rose as much as 9.7%.
Automakers Hyundai and Kia saw gains of around 12% and 9% respectively.
The agreement, detailed following a meeting between President Lee Jae Myung and U.S. President Donald Trump, includes lower U.S. tariffs on South Korean goods in exchange for a $350 billion investment pledge from Seoul — 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 drop to 15% from the earlier “tariff letter” rate of 25%. South Korea’s $350 billion investment pledge reportedly includes $200 billion in direct investment and $150 billion allocated to shipbuilding cooperation.
The $200 billion in investment would be capped at $20 billion per year, South Korea’s chief policy advisor, Kim Yong-beom, was reported as saying.
Trump also said in a Truth Social post that he had approved South Korea to build a nuclear submarine in “the Philadelphia Shipyards.” This would be Seoul’s first nuclear submarine.
South Korean shipbuilder Hanwha had made a $5 billion investment into the Philly Shipyards back in August as part of Seoul’s earlier commitment to invest $150 billion.
“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,” Alex Wong, Hanwha Chief Strategy Officer, said in a statement.
South Korea’s Yonhap also reported that a fact sheet covering both the trade and security components of the agreement between Seoul and Washington will be released in the coming days.