United States President Donald Trump has introduced a commerce take care of South Korea, the most recent settlement unveiled forward of his August 1 deadline for the imposition of steep tariffs on dozens of nations.
Underneath the “full and full” commerce deal, South Korean items will likely be topic to a 15 % tariff, whereas US exports won’t face duties, Trump stated on his Reality Social platform on Wednesday amid a blitz of trade-related bulletins that additionally included new US duties on Brazil and India.
US and South Korean officers confirmed that the 15 % fee would apply to autos, a win for the East Asian nation’s automotive trade, which had been topic to Trump’s 25 % tariff on autos and auto elements.
Seoul stated it had declined requests for better US entry to its rice and beef markets, a politically fraught situation that has attracted fierce resistance from South Korean farmers.
However in a blow for South Korea’s metal trade, the world’s sixth largest, US Commerce Secretary Howard Lutnick stated the settlement didn’t decrease present tariffs on metal, aluminium and copper.
Trump stated South Korea would additionally contribute $350bn for investments “owned and managed” by the US and buy $100bn in liquefied pure gasoline and different vitality merchandise.
The East Asian nation additionally agreed to take a position a “massive sum” of cash for its personal funding functions, Trump stated, with the quantity to be introduced “throughout the subsequent two weeks” throughout a go to by South Korean President Lee Jae-myung to the White Home.
“It’s also agreed that South Korea will likely be fully OPEN TO TRADE with america, and that they are going to settle for American product together with Vehicles and Vehicles, Agriculture, and so on,” Trump wrote.
Lee, who took workplace in June after a months-long management vacuum prompted by impeached former President Yoon Suk-yeol’s short-lived declaration of martial regulation, stated the settlement “eradicated uncertainties” and ensured that South Korea would pay tariffs at equal or decrease ranges than its rivals.
“The hot button is to not pursue unilateral advantages however to derive mutually useful outcomes,” Lee stated in a submit on Fb.
“This settlement is the end result of aligning the US pursuits in revitalising its manufacturing trade with our willpower to broaden the competitiveness of our firms within the US market. By this, we anticipate that industrial cooperation between Korea and the US will likely be additional strengthened, and the Korea-US alliance will grow to be much more strong.”
Lee described the $350bn in investments introduced by Trump as a “fund” that will help South Korean firms’ entry into the US.
The investments will likely be directed at industries the place South Korea possesses “strengths”, Lee stated, akin to shipbuilding, semiconductors, secondary batteries, biotechnology and vitality.
Kathleen Oh, chief Korea economist at Morgan Stanley, referred to as the settlement “a case of the worst averted.”
“We see the small print of the deal as broadly constructive, in step with our base case,” Oh stated in a observe.
South Korea’s KOSPI rose about 0.4 % in early buying and selling on Thursday, earlier than dropping practically 0.9 % later within the morning.
South Korea-listed shares of Hyundai Motor and Kia fell sharply, with the nation’s two largest carmakers down about 3.5 % and 6 %, respectively, as of 11am native time (02:00 GMT).
South Korea, the US’s sixth-largest buying and selling companion, had confronted a 25 % normal tariff from August 1 if it didn’t attain a deal, along with separate duties on metal, aluminium, autos and auto elements.
South Korea’s exports have struggled beneath Trump’s tariffs, inserting a drag on its trade-reliant financial system.
Exports, which account for greater than 40 % of gross home product (GDP), declined 0.03 % year-on-year within the first half of 2025, in line with knowledge from the Ministry of Commerce, Trade and Power.
Asia’s fourth-largest financial system is projected to develop by 0.8 % in 2025, in line with the Worldwide Financial Fund, which might be its weakest efficiency since 2020, when COVID-19 introduced a lot financial exercise to a halt.
Trump has up to now introduced offers with seven buying and selling companions – the European Union, Japan, South Korea, the UK, Indonesia, Vietnam and the Philippines – in addition to a 90-day commerce truce with China.
In an interview with Fox Information late on Wednesday, Lutnick stated the US had additionally reached agreements with Cambodia and Thailand.
He didn’t present additional particulars.