Trump, South Korea strike 15% tariff deal ahead of deadline
SEOUL, July 31 (UPI) -- U.S. President Donald Trump announced Wednesday that the United States will impose a 15% tariff on South Korean goods in what he called a "full and complete trade deal" between the two countries ahead of an Aug. 1 deadline for negotiations.
The deal calls for $350 billion in South Korean investments "owned and controlled by the United States and selected by myself," Trump wrote on his Truth Social platform.
Seoul will also purchase $100 billion of U.S. liquified natural gas and will announce further investments when South Korean President Lee Jae Myung visits Washington "within the next two weeks," Trump said.
The arrangement comes just ahead of the Aug. 1 deadline for countries to make deals with Washington before facing higher "reciprocal" tariffs. South Korea was facing a 25% levy if it had not reached an agreement.
"We have overcome a major hurdle," South Korean President Lee Jae Myung wrote on Facebook Thursday. "Through these negotiations, the government has eliminated uncertainty in the export environment and aligned U.S. tariffs with those of our major export competitors, creating an environment where we can compete on equal or superior terms with major countries."
Lee said that $150 billion of the announced investment is earmarked for South Korean companies to enter the United States shipbuilding sector. Seoul had touted its world-class capacity as a key negotiating card, as the Trump administration is looking to revive the moribund American shipbuilding industry to counter China's massive naval growth.
The 15% tariffs will apply to South Korea's automobile industry -- its largest export sector to the United States -- U.S. Commerce Secretary Howard Lutnick wrote in a post on X.
"[South Korea] will also not be treated any worse than any other country on semiconductors and pharmaceuticals," he added.
The major South Korean exports of steel and aluminum will remain at the global rate of 50% that Trump has set, however.
Seoul was able to hold off Washington's push to further open up its rice and beef markets to U.S. imports, which farmers' groups in South Korea strongly opposed.
"In the course of the consultations with the United States, there was a strong demand for the opening up of our agricultural and livestock markets," Kim Yong-beom, the presidential chief of staff for policy, said at a press briefing Thursday.
"However, given food security and the sensitivity of our agriculture, it was agreed that the domestic rice and beef markets would not be further opened," Kim said.
While South Korea avoided higher tariffs with the new deal, it still represents a major increase over the existing U.S.-Korea Free Trade Agreement, under which roughly 95% of goods were duty-free.
"The 15% tariff by the United States is a different trading environment and challenge than in the past," Kim said. "The government will actively support our companies in enhancing their competitiveness and diversifying their export markets."
The South Korean trade deal follows others the Trump administration has made in recent weeks, including 15% reciprocal tariffs on Japan and the European Union, 19% on the Philippines and Indonesia and 20% on Vietnam.
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