A significant trade agreement has been reached between the United States and South Korea, as announced by both nations following high-level discussions. The deal includes a reduction in reciprocal tariffs, moving them from 25% to 15%, a modification building upon an earlier agreement. Furthermore, South Korea has committed to a substantial investment of $350 billion in the US, encompassing $200 billion in direct cash investment and an additional $150 billion dedicated to the shipbuilding sector.
US President Donald Trump, speaking after a nearly two-hour meeting with South Korean President Lee Jae Myung, described the agreement as “pretty much finalised.” While specific details were not immediately released by the President, he expressed optimism about the outcome of the talks, which occurred during his week-long tour of Asia. This development comes as a relief to South Korea’s vital electronics, chip, and automotive industries, which had been anticipating clarity amidst ongoing tariff uncertainties.
The tariff reduction from 25% to 15% for Seoul was a key negotiation point, achieved through President Lee’s efforts. This was part of a broader package that also included South Korea’s commitment to invest $350 billion in the US and purchase $100 billion worth of liquefied natural gas. The White House had reportedly increased its demands during the trade talks, emphasizing the importance of direct cash investments in the US.
The relationship between the two countries, historically strong allies, has faced recent strains, including a notable immigration raid in the US that led to the detention of hundreds of South Koreans.
Looking ahead, President Trump is scheduled to meet with Chinese President Xi Jinping on Thursday, on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit in Gyeongju. This meeting is anticipated to address ongoing trade discussions between the US and China. President Trump has expressed his eagerness for the meeting, anticipating a “very, very satisfactory” outcome for both nations.
During his visit, President Trump received a golden crown and the Grand Order of Mugunghwa, South Korea’s highest decoration, recognizing his contributions to peace on the Korean Peninsula. The leaders engaged in a working lunch followed by a private meeting.
The trip also saw Trump’s prior visit to Japan, where he signed an agreement on rare earth minerals and heralded a new era in US-Japan relations. He also facilitated a peace deal between Thailand and Cambodia during his attendance at the Asean summit in Malaysia.
The news of the trade deal follows recent missile tests by North Korea, with President Trump noting his interest in meeting with North Korean leader Kim Jong Un, though arrangements for such a meeting were not confirmed during the trip. Public sentiment in South Korea surrounding the visits was mixed, with protests against Trump’s policies occurring alongside pro-Trump rallies.