South Korea and US Finalize Trade Agreement with Tariff Reductions

Thu Oct 30 2025 02:46:18 GMT+0200 (Eastern European Standard Time)

A new trade deal has been struck between South Korea and the United States, significantly lowering tariffs and involving substantial investment from South Korea in the US economy.

A recent meeting between US President Donald Trump and South Korean President Lee Jae Myung resulted in a major trade deal, which includes reducing reciprocal tariffs from 25% to 15% and committing $350 billion in investments from South Korea to the US. The announcement aims to bolster industrial collaboration and strengthen economic ties between the two nations amid ongoing discussions about trade regulations.

The US and South Korea have reached a broad trade deal, both countries have said following talks between their leaders.

South Korea's presidential aide, Kim Yong-beom, said the two sides will reduce reciprocal tariffs from 25% to 15%, as was agreed earlier this year.

South Korea will also invest $350bn in the US, including $200bn in cash investment and $150bn in shipbuilding, Kim said.

US President Donald Trump, who is currently on a week-long trip in Asia, said the deal was pretty much finalized at a dinner following the discussions, which lasted almost two hours. He did not give further details.

We had a tremendous meeting today with South Korea, Trump said of his discussions with South Korean President Lee Jae Myung, adding that a lot was determined.

We discussed some other things to do with national security et cetera. And I think we came to a conclusion on a lot of very important items.

Both sides had played down the prospect of a breakthrough ahead of Wednesday's talks - disappointing many in South Korea's electronics, chip and auto industries, which had been hoping for some clarity amidst the tariff chaos.

Trump had slapped a tariff rate on Seoul of 25% earlier this year - which Lee managed to negotiate down to 15%, after Seoul said it would invest $350bn in the US and buy $100bn worth of liquefied natural gas.

But the White House later increased its demands as part of the trade talks, with Trump pushing for cash investments in the US.

Both countries have historically been key allies - but tensions spiked after hundreds of South Koreans were detained in an immigration raid in the US last month.

Trump will next meet his Chinese counterpart Xi Jinping on Thursday on the sidelines of a summit of the Asia-Pacific Economic Cooperation (Apec) which is taking place in Gyeongju. The US president said he was looking forward to the meeting.

During his trip to Japan on Tuesday, the US president signed an agreement on rare earth minerals with Tokyo, reinforcing the commitment of the two countries to implement earlier agreements.