On March 12, 2026, South Korea’s National Assembly gave resounding approval to the 'Special Act on Strategic Investment between the Republic of Korea and the United States,' marking a pivotal moment in the economic partnership between the two allies. The law, commonly known as the Korea-US Strategic Investment Act, passed with 226 votes in favor, 8 against, and 8 abstentions out of 242 members present—a rare display of bipartisan consensus in a typically divided chamber.
The act sets the stage for an unprecedented $350 billion investment by South Korea into the United States, targeting critical sectors such as shipbuilding and semiconductors. According to Yonhap News, this legislation provides the legal and institutional foundation for implementing the Korea-US Memorandum of Understanding (MOU) on strategic investment, which was signed just four months prior, in November 2025.
At the heart of the law is the establishment of the Korea-US Strategic Investment Corporation, a government-funded entity with a capital base of 2 trillion KRW (about $1.5 billion USD). The government will fully fund the corporation, and the timing and method of capital contribution will be determined by presidential decree. The corporation will operate for up to 20 years before being dissolved, as outlined by News1.
Within this new corporation, the Korea-US Strategic Investment Fund will be created to ensure systematic and efficient management of the massive investment resources. The fund will draw its assets from corporation contributions, entrusted assets with prior consent, and bonds issued specifically for the initiative. Its primary uses will include direct investments, loans, and guarantees to support shipbuilding cooperation and other strategic industries, as reported by Straight News.
Of the $350 billion, $150 billion is earmarked exclusively for shipbuilding—a nod to Korea’s global leadership in this industry—while $200 billion will be channeled into sectors that enhance the economic and national security interests of both countries. These include emerging technologies, energy, and other fields deemed vital for the future, according to JoongAng Ilbo.
The act also mandates robust oversight and risk management. A Risk Management Committee will be established within the corporation to monitor operational risks. Furthermore, the government is required to submit annual reports to the National Assembly’s relevant standing committees, detailing fund management, economic and industrial impact assessments, and the progress of strategic investments. If an investment project lacks commercial rationality but is deemed necessary for national security or supply chain stability, it can proceed only with prior consent from the relevant parliamentary committee, as described by The Hankyoreh.
Political momentum for the legislation accelerated dramatically in January 2026, when former US President Donald Trump threatened to reinstate tariffs on Korean automobiles and parts if the Korean parliament failed to pass the enabling law. This external pressure led Korea’s rival political parties to form a special committee, which, after a month of intense discussions, unanimously approved the bill on March 9, 2026. The bipartisan nature of the final vote was widely praised. National Assembly Speaker Woo Won-sik declared, “National interest transcends party lines. Today, we confirmed that there can be no division when it comes to the good of our country.”
President Lee also expressed gratitude via social media, stating, “I deeply thank the National Assembly for making this historic decision for our economy and security.” He added, “With the passage of this special law, we now have the legal and institutional foundation to implement the Korea-US tariff agreements. Both countries will build even closer and stronger cooperation in strategic sectors such as shipbuilding and energy. The government will ensure a seamless rollout of all necessary follow-up measures.”
Minister of Economy and Finance Koo Yoon-cheol echoed these sentiments, emphasizing that the law’s passage comes at a time of heightened uncertainty in global supply chains and trade. He argued that the act would help reduce risk for Korean businesses and reinforce the country’s economic resilience. Minister of Trade, Industry, and Energy Kim Jeong-gwan added that the law demonstrates the government and parliament’s united resolve to maintain stable tariff agreements and deepen strategic cooperation with the United States. “We will work closely with the US to ensure this MOU leads to stronger industrial collaboration and expanded opportunities for Korean firms in the American market,” Kim said.
The act also sets strict requirements for leadership of the new corporation. The president of the Korea-US Strategic Investment Corporation will serve a three-year term and must have at least a decade of experience in finance or strategic industries. This provision aims to ensure that only seasoned experts will be at the helm of such a critical initiative.
Not all voices in the Assembly were in full support. During the debate, some opposition lawmakers raised concerns about the speed and substance of the bill. Kim Jun-hyung of the National Innovation Party argued, “There is no reason for our National Assembly to rush to accommodate the Trump administration’s demands for investment. Allowing exceptions to the law’s commercial rationality principle is problematic.” Jin Sung-jun of the Progressive Party added, “The United States just launched a Section 301 trade investigation against us. This law gives the US a free pass to pressure Korean investments.”
Despite these reservations, the overwhelming majority in the Assembly saw the law as an essential step for Korea’s economic and security interests. The Democratic Party, which first proposed the law on November 26, 2025, highlighted the urgency of passing it to secure Korea’s position in the global supply chain and to lock in tariff reductions for Korean exports, especially automobiles and components.
The law’s passage was part of a busy legislative session. On the same day, the National Assembly also approved 53 other bills, including amendments to the Academy Act, laws targeting telecommunications fraud, support for science and technology, and compensation for victims of the humidifier disinfectant scandal. Democratic Party lawmaker Jin Sung-jun was elected chairman of the Budget and Accounts Special Committee, underscoring the day’s significance for parliamentary business.
With the law now approved, the government plans to move swiftly. Preparations are underway to promulgate the law and establish the preparatory committee for the new corporation and fund. The legislation will take effect three months after promulgation, with subordinate regulations and executive actions to follow in rapid succession.
As Korea and the United States look to deepen their strategic partnership, the Korea-US Strategic Investment Act stands as a testament to the power of bipartisan cooperation in the face of global uncertainty. Whether the law will deliver on its ambitious promises remains to be seen, but for now, the stage is set for a new era in Korea-US economic relations.