42 South Korean companies to invest $17bn in US by 2021
Lotte Chemical, Hankook Tire to build production lines in southern states
KIM JAEWON, Nikkei staff writer
SEOUL -- Seoul unveiled plans on Thursday by 42 South Korean companies to invest a combined $17.3 billion in the U.S. over the next four years, under pressure by President Donald Trump to address the trade "imbalance" between the two countries.
The presidential Blue House said Thursday that the list of companies includes Lotte Chemical which announced it would invest $3.1 billion in a petrochemical facility in Louisiana and Hankook Tire which planned to build a new factory in Clarksville, Tennessee by injecting $800 million. SK Innovation is also set to produce ethylene acryl acid in Texas by acquiring Dow Chemical's EAA business for $370 million.
"President Moon and President Trump agreed that it is important to strengthen economy, trade and investment between South Korea and the U.S.," said the Blue House in a joint press release with the White House. "South Korea is the second-largest Asian country in the U.S. by foreign direct investment. South Korean companies are offering some 52,000 jobs in the U.S."
Trump demanded during his two-day visit which ended Wednesday that Seoul must do more to address the U.S. trade deficit with South Korea. Data from the Korea International Trade Association showed that South Korea exported $66.4 billion to the U.S. but imported just $43.2 billion from the country in 2016, leaving a trade surplus of $23.2 billion.
On Thursday, the Korea Chamber of Commerce and Industry also said that 24 South Korean companies would buy U.S. products and services worth $57.5 billion, including $22.8 billion from the energy sectors, between now and 2021, but did not name the entities.
In addition, President Moon Jae-in told Trump that the country would increase its defense budget significantly by 2022 to buy more U.S. military equipment, such as F-35A joint strike fighters, and to upgrade KF-16 fighter jets and Patriot PAC-3 ballistic missiles, among others. Trump said he appreciated Moon's efforts to spend "billions of dollars" on American military ware.
South Korea is already one of the largest buyers of U.S. arms, purchasing more than $13 billion of military equipment over the last three years, according to the Blue House.
Trade aside, the bilateral relationship is more important than ever in the face of an increasingly belligerent North Korea. South Korea and the U.S. reaffirmed their alliance during the trip, with Trump warning North Korea that he would not allow it to threaten the safety of South Korea.