The United States and South Korea have announced a broad trade deal following discussions between their leaders. As part of the agreement, reciprocal tariffs will be maintained at 15%, with specific reductions for car and car parts. South Korea also committed to investing $350 billion in the US, comprising $200 billion in cash and $150 billion in shipbuilding.
Trade Agreement Details
South Korea's presidential aide, Kim Yong-beom, stated that the two nations agreed to keep reciprocal tariffs at 15%, with tariffs on cars and car parts to be lowered. Kim also confirmed South Korea's commitment to invest $350 billion in the US, divided into $200 billion in cash and $150 billion in shipbuilding. US President Donald Trump described the deal as "pretty much finalised" following discussions that lasted nearly two hours, but provided no additional details.
A trade deal announced in late July had previously outlined South Korea's intention to invest $350 billion in the US to mitigate tariffs, though subsequent talks regarding the structure of these investments had faced a deadlock.
US-Korea Relations and President Trump's Visit
Historically, the US and South Korea have been allies. However, tensions arose last month following the detention of hundreds of South Koreans in a US immigration raid.
Ahead of discussions with President Lee, President Trump was greeted with an honor guard and received a golden crown, along with the Grand Order of Mugunghwa, South Korea's highest decoration. The South Korean presidential office stated that President Trump is the first US president to receive this award, presented "in recognition of his contribution to peace on the Korean Peninsula."
Both leaders participated in a working lunch, followed by a private meeting. No specific deal was announced immediately after the private meeting. Both sides had previously lowered expectations for an immediate breakthrough in these particular discussions. Earlier in the year, President Trump had imposed a 25% tariff rate on Seoul, which President Lee negotiated down to 15% after South Korea agreed to invest $350 billion in the US and purchase $100 billion worth of liquified natural gas. The White House later increased its demands during the trade talks, seeking additional cash investments in the US.
Broader Diplomatic Engagements
President Trump is on a week-long trip in Asia. His next meeting is scheduled with Chinese counterpart Xi Jinping on Thursday in Busan, on the sidelines of an Asia-Pacific Economic Cooperation (Apec) summit taking place in Gyeongju. China's foreign ministry confirmed this meeting. This will mark the first face-to-face meeting between the two leaders since President Trump assumed office and implemented various tariffs.
Addressing a group of CEOs in Gyeongju on Wednesday, President Trump expressed his belief that the US is "going to have a deal" with China, anticipating it to be "a good deal for both." He also acknowledged Apec countries for their efforts in improving the global trading system, which he described as "broken" and "in urgent need of reform." President Trump emphasized, "Economic security is national security."
Regional Context and Public Response
President Trump's arrival in South Korea was preceded by North Korea test-firing surface-to-air cruise missiles. President Trump had expressed interest in meeting North Korean leader Kim Jong Un but stated on Wednesday that his team was unable to arrange such a meeting during his current trip. Regarding the ongoing tensions between North and South Korea, he commented, "we will see what we can do to get that all straightened out."
Outside the summit venue on Wednesday afternoon, a small group of anti-Trump protesters gathered, some shouting anti-Trump slogans. Police dispersed the crowd and made arrests. Separately, hundreds attended a pro-Trump rally nearby, where some participants expressed anti-Chinese rhetoric. Anti-Chinese sentiment has reportedly increased in South Korea in recent years, with allegations of Chinese interference circulating in discussions surrounding former South Korean president Yoon Suk Yeol.