U.S. and South Korea strike a trade deal with tariffs on Seoul set at 15%

U.S. President Donald Trump connected Wednesday announced that Washington had reached a "Full and Complete" commercialized woody with Seoul, mounting broad tariffs connected the country's exports to U.S. astatine 15%.

This woody means that duties volition beryllium lowered from the 25% that Trump had threatened successful his "tariff letter" to Seoul earlier this month. Tariffs connected the country's car exports acceptable astatine 25% volition besides beryllium chopped to 15%.

Trump besides said successful his station connected societal media level Truth Social that South Korea "will springiness to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, arsenic President."

There appeared to beryllium a quality successful the mentation betwixt Seoul and Washington connected however that magnitude would beryllium utilized.

Announcing successful a station connected Facebook that his state had "concluded tariff negotiations" with the United States, South Korea's President Lee Jae-myung said that the $350 cardinal money "will play a relation successful facilitating the progressive introduction of Korean companies into the US marketplace successful industries wherever we person strengths, specified arsenic shipbuilding, semiconductors, secondary batteries, biotechnology, and energy," according to a CNBC translation of his connection successful Korean.

He said $150 cardinal of that allocation volition beryllium for "shipbuilding practice providing beardown enactment for Korean companies entering the US shipbuilding industry," adding that "It's important to execute mutually beneficial outcomes, not conscionable prosecute unilateral gains."

In comments to CNBC aft the woody was announced, Louise Loo, caput of Asia economics astatine advisory steadfast Oxford Economics, said that the numbers announced truthful acold "don't adhd overmuch much clarity — arsenic with the deals [the] US struck with different Asian peers."

U.S. Commerce Secretary Howard Lutnick said that "90% of the profits" from that $350 cardinal concern volition beryllium "going to the American people." This is akin to what Trump announced astir Japan's concern successful the U.S. arsenic portion of a commercialized woody agreed earlier this month, which has reportedly been challenged by Tokyo.

Japan's authorities said Friday that profits from a $550 cardinal concern agreed successful the tariff woody with the U.S. would beryllium divided betwixt the 2 countries based connected their grade of contributions, according to a Reuters report.

Wendy Cutler, senior vice president of the Asia Society Policy Institute and erstwhile lawman U.S. commercialized typical said successful a enactment that "Once a U.S. commercialized woody was concluded with Japan, Korean negotiators had small prime but to enactment hard to reason their ain commercialized woody truthful arsenic not to beryllium disadvantaged successful the U.S. market."

While Seoul did not negociate to get immoderate concessions connected alloy and semiconductors, she noted that it had successfully resisted U.S. calls to further unfastened its beef and atom markets, which Cutler describes arsenic "two highly delicate sectors."

Trump connected Wednesday besides said that arsenic portion of the deal, Seoul volition acquisition $100 cardinal dollars of LNG oregon different vigor products from the U.S, adding that Seoul had besides agreed to put "a ample sum of wealth for their Investment purposes."

The sum volition beryllium disclosed erstwhile Lee visits Washington for a bilateral acme wrong the adjacent 2 weeks, helium added.

U.S. goods volition not beryllium subjected to immoderate tariffs, Trump said. As of 2024, South Korea's effectual tariff complaint for goods imported from the U.S. was astir 0.79%.

ASPI's Cutler said that the caller woody "negates the worth of our bilateral FTA wherever the US and Korea eliminated astir each of their respective tariffs. As an FTA partner, Korea regrettably seems to person not received immoderate peculiar treatment." Seoul has had a escaped commercialized statement with the U.S. since 2012.

U.S. goods commercialized with South Korea was a small implicit $197 cardinal successful 2024, according to U.S. authorities data, and its shortage with the state stood astatine $66.0 cardinal successful 2024, 29.2% higher from a twelvemonth earlier.

Lee said successful his station that "I anticipation that done this, concern practice betwixt Korea and US volition beryllium strengthened and the confederation betwixt Korea and America volition besides beryllium strengthened," portion adding that Seoul volition support "diplomacy centered connected nationalist interest" arsenic its apical principle.

South Korea volition "not beryllium treated immoderate worse than immoderate different state connected semiconductors and pharmaceuticals. Steel, aluminum, and copper are not included and stay unchanged," Lutnick said. Steel, aluminum and copper exports to the U.S. crossed countries look 50% tariffs.

Oxford's Loo said South Korea locking successful a 15% tariff complaint for autos similar Japan "could beryllium seen arsenic a triumph for President Lee [Jae Myung]." She cautioned though that tariffs connected electronics and semiconductors could inactive beryllium escalated.

South Korea's benchmark Kospi scale was up 0.5% aft the announcement, portion yields connected its benchmark 10-year bonds were marginally higher.