President Donald Trump has announced a trade deal with South Korea. This is the latest agreement, announced ahead of the August 1 deadline for sudden tariff imposition on dozens of countries.
Under the “complete and complete” trade agreement, South Korean goods will be subject to 15% tariffs, but US exports will not face duties, Trump said on his true social platform on Wednesday in his true social platform in a blitz of trade-related announcements that also includes new US obligations in Brazil and India.
US and South Korean officials have confirmed that a 15% rate applies to vehicles. This has beaten the East Asian automotive industry.
Seoul said it had rejected requests to expand access to the US and beef market. This is a politically challenging issue that has attracted intense resistance from Korean farmers.
But in the world’s sixth-largest blow to South Korea’s steel industry, U.S. Secretary of Commerce Howard Lutnick said the agreement would not lower existing tariffs on steel, aluminum and copper.
Trump said South Korea will donate $3500 billion to US “owned and controlled” investments and buy $100 million in liquefied natural gas and other energy products.
The East Asian country has also agreed to invest “a large amount” of funds for its own investment purposes, along with the amount announced “in the next two weeks” when South Korean President Lee Jae-myeon visited the White House.
“We also agree that South Korea is completely open to trade with the United States and accepts American products, including cars, trucks, agriculture and more,” Trump wrote.
Lee, who took office in June by former President Yuk Yeol’s short-lived martial law declaration, which was fired up by a few months-long leader vacuum, said the agreement “eliminates uncertainty” and ensured that South Korea pays tariffs at equal or lower levels than its competitors.
“The key is not to pursue unilateral benefits, but to derive mutually beneficial results,” Lee said in a Facebook post.
“This agreement is the result of adjusting US interests in revitalizing manufacturing with our determination to expand our competitiveness in the US market. Through this, we expect further strengthening industrial cooperation between South Korea and the US and further strengthening the South Korea-US alliance.”
Lee described Trump’s $3500 billion investment as a “fund” to help Korean companies enter the United States.
The investment is directed towards industries where South Korea has “strengths,” Lee said it is “strengths” such as shipbuilding, semiconductors, secondary batteries, biotechnology and energy.
Kathleen Ohio, a Korean economist at Morgan Stanley, called the agreement “the worst case that could be avoided.”
“We consider the details of this transaction to be broadly positive, in line with our basic case,” Oh said in a memo.
Korean Kospi rose about 0.4% in early trading on Thursday, then fell nearly 0.9% in the morning.
Shares of Hyundai Motor and KIA, registered in South Korea, fell by two largest automakers in the country, each with a decline of about 3.5% and 6% respectively, at 11am local time (02:00 GMT).
South Korea, the US’s sixth largest trading partner, faced general tariffs of 25% from August 1, in addition to individual missions on steel, aluminum, vehicles and automotive parts, if the transaction was not reached.
South Korea’s exports are struggling under Trump’s tariffs and are dragged by a trade-dependent economy.
Exports, which account for more than 40% of GDP, fell 0.03% year-on-year in the first half of 2025, according to data from the Ministry of Trade, Industry and Energy.
Asia’s fourth largest economy is projected to increase by 0.8% in 2025, according to the International Monetary Fund. This is the weakest performance since 2020, when Covid-19 halted many economic activities.
To date, Trump has announced a 90-day trade ceasefire with China with seven trading partners: the European Union, Japan, South Korea, the UK, Indonesia, Vietnam and the Philippines.
In an interview with Fox News later Wednesday, Rutnick said the US had also reached an agreement with Cambodia and Thailand.
He did not provide further details.
