By Tafara Pande
WASHINGTON, DC — United States President Donald Trump has announced a new trade agreement with South Korea, setting tariffs on South Korean goods at 15 percent while exempting US exports from duties.
The deal, revealed on Trump’s Truth Social platform on Wednesday, comes just ahead of his August 1 deadline for imposing sweeping tariffs on dozens of countries. It marks the latest in a string of high-profile trade announcements, including new duties targeting Brazil and India.
Under the terms, the 15 percent tariff will apply to South Korean vehicles, a major victory for Seoul’s auto industry which had been bracing for a 25 percent levy on cars and parts. However, existing US tariffs on South Korea’s steel, aluminum, and copper remain unchanged, dealing a blow to one of the nation’s key export sectors.
Trump said South Korea has also agreed to contribute $350 billion in investments “owned and controlled” by the US, alongside an additional $100 billion in purchases of liquefied natural gas and other energy products. He added that a “large sum” in further investments would be announced during South Korean President Lee Jae-myung’s upcoming White House visit.
“It is also agreed that South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American products including Cars and Trucks, Agriculture, etc.,” Trump wrote.
President Lee, who took office in June following a turbulent political transition, hailed the deal as a step toward stability. “This agreement eliminates uncertainties and ensures mutually beneficial results,” Lee said on Facebook. He described the $350 billion investment pledge as a fund to support South Korean firms entering the US market, particularly in shipbuilding, semiconductors, biotechnology, and energy.
Market reaction was mixed. South Korea’s benchmark KOSPI initially rose 0.4 percent before slipping nearly 0.9 percent later in the morning. Shares of Hyundai and Kia fell sharply, down 3.5 percent and 6 percent respectively.
Economists offered cautious optimism. Kathleen Oh, chief Korea economist at Morgan Stanley,
said the agreement was “a case of the worst avoided,” calling the terms broadly positive compared with previous expectations.
South Korea, Washington’s sixth largest trading partner, had faced a looming 25 percent tariff hike if a deal had not been reached. Exports, critical to South Korea’s economy and making up over 40 percent of GDP, had already been strained under Trump’s trade policies, with a 0.03 percent
