SEOUL — President Trump introduced on Wednesday that the U.S. had struck a commerce cope with South Korea, which is able to now face a 15% tariff on its exports.
Underneath the deal, South Korea will make investments $350 billion in key U.S. industries and buy $100 billion value of its liquified pure fuel, Trump wrote on social media on Wednesday. He added that additional investments can be introduced when South Korean President Lee Jae Myung visits Washington within the subsequent two weeks.
The brand new charge is a major discount from the 25% Trump had introduced through a letter earlier this month, however nonetheless a blow to the longstanding free commerce regime that had, for years, saved duties on items from both nation near zero. Trump has lengthy decried this association as unfair to the U.S., which final 12 months recorded a $66 billion commerce deficit with South Korea.
“We are seeing that the negotiations happening in many countries since April are unfolding in a way that is very different from the principles of the WTO or FTA,” stated Kim Yong-beom, a senior coverage official for South Korea’s presidential workplace, at a press convention on Thursday. “It is regrettable.”
Kim stated that South Korean negotiators had pushed for a 12.5% charge on cars — one of many nation’s most necessary exports to the U.S. — however that that they had been rebuffed, with Trump agency on his stance that “everybody gets 15%.”
U.S. and South Korean officers look like decoding the deal — whose particulars are nonetheless scant — in several methods.
New automobiles for export on a automotive service trailer arrive at a port in Pyeongtaek, South Korea, on April 15, 2025.
(Lee Jin-man / Related Press)
Calling it an “historic trade deal,” commerce secretary Howard Lutnick wrote on social media that “90% of the profits” of South Korea’s $350 billion funding would go “to the American people,” a declare that has instantly raised eyebrows in South Korea.
Trump stated one thing related concerning the $550 billion funding package deal included within the commerce deal struck with Japan earlier this month. Japanese officers, however, have stated the earnings can be cut up proportionately, primarily based on the quantity of contribution and threat from either side.
On the press convention, Kim stated that Seoul is working beneath the idea that 90% of the earnings shall be “re-invested” — not unilaterally claimed. He added that the precise phrases nonetheless have to be laid out on a “per-project basis.”
“In a normal civilized country, who would be able to accept that we invest the money while the U.S. takes 90% of the profits?“ he asked.
South Korean President Lee Jae Myung has framed the $350 billion investment as a boost to South Korean shipbuilding, semiconductor and energy companies trying to make inroads into the U.S. markets.
“This agreement is the meeting of the U.S.’ interest in reviving manufacturing and our intention to make South Korea companies more competitive in the U.S. market,” he stated in a social media submit on Thursday. “I hope that it will strengthen industrial cooperation between South Korea and the U.S. as well as our military alliance.”
Whereas Trump additionally stated that “South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc,” Kim stated that agriculture was not a part of the deal and that no concessions on U.S. rice or beef — two main factors of rivalry between Seoul and Washington — got.
South Korea, which is the world’s high importer of American beef, at the moment bans beef from cattle which are older than 30 months on considerations it could introduce bovine spongiform encephalopathy, or mad cow illness.
Given its standing as a staple crop and a vital supply of farmers’ livelihoods, rice is likely one of the few agricultural items closely protected by the South Korean authorities. Seoul at the moment imposes a 5% tariff on U.S. rice as much as 132,304 tons, and 513% for any extra.
“We were able to successfully defend a lot of our positions in those areas,” Kim stated.
