Following high-level discussions, South Korea and the United States have announced a comprehensive trade deal. Key aspects of the agreement include maintaining reciprocal tariffs at 15% while also reducing taxes on automobiles and their parts. South Korea has committed to investing $350 billion in the US economy, comprising $200 billion in direct cash investment and $150 billion earmarked for shipbuilding.
US President Donald Trump described the deal as “pretty much finalised” after a dinner meeting that followed nearly two hours of talks. While further specifics were not immediately disclosed by the US president, the agreement builds upon a preliminary deal reached in late July, which aimed to avert harsher tariffs by securing significant investment from South Korea into America. However, negotiations over the exact structure of these investments had previously been at an impasse.
This development occurs amidst broader diplomatic engagements for President Trump in Asia. He is scheduled to meet with Chinese President Xi Jinping on Thursday on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit. This meeting will mark their first face-to-face encounter since Trump’s inauguration, and comes at a time when he has implemented global tariffs. Trump expressed optimism about reaching a “good deal for both” with China, highlighting the need for reform in the global trading system, which he characterized as “broken.”
During his visit, President Trump received a warm welcome in South Korea, including a golden crown and the Grand Order of Mugunghwa, the nation’s highest decoration, recognizing his contributions to peace on the Korean Peninsula. Working lunches and private meetings were held, although specific outcomes beyond the trade deal were not detailed. Both nations had managed expectations regarding immediate breakthroughs, which may disappoint South Korean industries like electronics, semiconductors, and automotive manufacturing that sought clarity amid trade uncertainties.
The current agreement appears to represent a compromise, with South Korea successfully negotiating down an initial 25% tariff threat from the US to 15%, partly through commitments to invest and purchase liquefied natural gas. The White House, however, had later increased its demands for direct US investments during trade talks.
The article also touches upon broader geopolitical tensions, mentioning North Korea’s missile tests preceding Trump’s visit and the US president’s interest, though ultimately unsuccessful, in meeting with North Korean leader Kim Jong Un. It also briefly notes the mixed public reception to Trump’s visit in South Korea, with both pro- and anti-Trump protests occurring.
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