*

South Korean carmakers welcome deal to lower US tariffs

*

Pressure on South Korean currency likely a deciding

factor,

analyst says

*

The won rises following announcement

(Recasts with analysts, Hyundai reaction)

By Jihoon Lee and Trevor Hunnicutt

GYEONGJU, South Korea, Oct 29 (Reuters) - A trade deal

reached by the U.S. and South Korea on Wednesday at their

leaders' summit is a best-case compromise to untangle a deadlock

in tariff talks that had raised questions about the Asian

country's export-heavy economy, analysts said.

U.S. President Donald Trump and South Korean officials

announced the leaders had finalized details of their fraught

trade deal on how to structure a $350 billion investment in the

U.S. in return for cuts to import duties on South Korean goods.

Central to the agreement was to set tariffs on Korean auto

and auto parts at 15%, down from current 25%, to put them on par

with their Japanese competitors. The U.S. is a major market for

Hyundai Motor ( HYMLF ) and affiliate Kia Corp ( KIMTF ), which are together the

world's third largest carmakers by sales.

"We appreciate the constructive efforts of the U.S.

administration and the Korean government to resolve business

uncertainty and support a positive future trade environment for

both countries," Hyundai Motor Group said in a statement.

WON RISES FOLLOWING ANNOUNCEMENT

The deal ensures the companies can grow their commitment in

the U.S., creating jobs and expanding localisation that would

help the United States prosper, it said.

The announcement of the deal by Trump and South Korean

President Lee Jae Myung, later confirmed by South Korean

presidential aides, lifted the Korean won by 0.54%

against the dollar by 1001 GMT.

South Korean and U.S. officials have wrangled over dozens of

meetings on how to structure the $350 billion in investment

promised by South Korea in a way that would not jeopardize the

American ally's financial markets.

"It appears there was a consensus that further delay would

not be helpful to either country," said Heo Yoon, an economics

professor at Sogang University in Seoul.

For Korea, the continued uncertainty surrounding its

currency and the carmakers' ability to compete in the U.S.

market likely factored as a decisive pressure, he said.

Lee has said an upfront outflow of $350 billion in cash as

earlier demanded by Trump would seriously destabilize South

Korea's currency. Wednesday's agreement laid out a plan for $200

billion in investment spread over years not to exceed $20

billion a year. The remaining $150 billion would be invested in

rebuilding America's shipbuilding.

"South Korea came out better than the worries in the

financial markets," said Moon Hong-cheol, an economist at DB

Securities in Seoul. While uncertainties remain in implementing

the deal, the won is likely to gain a gradual boost, he said.