Trump Slashes Tariffs on South Korea in Landmark Trade Deal Worth $350 Billion
The agreement comes amid a flurry of trade moves before the August 1 deadline for higher tariffs. South Korean President Lee Jae Myung called the deal a major breakthrough, noting it removes uncertainty and ensures fairer tariff treatment compared to rivals like Japan and the EU. Trump confirmed that Lee will visit the White House within two weeks for their first official meeting.
As part of the deal, South Korea will allow U.S. goods such as automobiles and agricultural products into its market without additional import duties. However, Seoul resisted U.S. pressure to open its rice and beef sectors further. Citi economist Kim Jin-wook noted that while the U.S. gains headline benefits, the finer terms seem favorable to South Korea.
The $350 billion investment includes $150 billion for shipbuilding and $200 billion in sectors like semiconductors, nuclear power, biotech, and batteries. However, many details remain unclear—including the sources of funding and implementation timeline. A South Korean official said existing corporate investments would contribute to the fund.
U.S. Commerce Secretary Howard Lutnick said 90% of profits from the fund would benefit Americans. South Korea will also increase energy imports—LNG, LPG, oil, and limited coal—shifting some purchases from the Middle East to U.S. sources over 3.5 years.
Tariffs on South Korean cars will drop to 15%. Exports like chips and pharmaceuticals won't face harsher treatment, though steel and aluminum are excluded from the deal. The agreement comes as South Korea faces political upheaval after the impeachment of former President Yoon Suk Yeol. The deal was reached under pressure, following Japan's earlier success in securing its own trade terms.
(With inputs from agencies)
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