The United States and South Korea have reached an agreement on the key details of a long-awaited trade deal, according to South Korean presidential chief of staff for policy Kim Yong-beom.
The announcement came after a bilateral meeting between President Lee Jae Myung and US President Donald Trump on the sidelines of the APEC Summit in Gyeongju on Wednesday.
The two leaders finalized discussions that had been ongoing since July, when the countries agreed on the general framework of the deal.
That preliminary agreement had already reduced reciprocal tariffs to 15%, though South Korea’s automobile exports to the US were still subject to a 25% tariff.
Wednesday’s meeting resolved those remaining issues, with the auto tariff now expected to fall to 15%, matching Japan’s rate.
The agreement also includes tariff adjustments on semiconductors, making them more competitive relative to products from Taiwan.
Trump said the deal is “pretty much finalized,” although no formal signing has yet taken place.
$350 Billion investment commitment and shipbuilding cooperation
A key component of the deal involves $350 billion in South Korean investments in the US economy.
According to Kim, $200 billion will be invested in cash and the remaining $150 billion will come through shipbuilding cooperation led by South Korean companies.
The cash portion will be deployed gradually over several years, with annual investments capped at $20 billion depending on business progress.
This structure, Kim explained, is designed to manage the pressure on South Korea’s foreign exchange market, which was a significant concern when Washington initially requested the entire sum be paid upfront in cash.
“The limit would make it manageable for South Korea’s market stability,” Kim said, emphasizing that the arrangement balances US investment goals with Seoul’s economic resilience.
President Trump described the discussions as “determined” and “tremendous,” adding that the two countries reached conclusions on “a lot of very important items,” including trade and national security.
The US president also praised the meeting’s atmosphere and South Korea’s hospitality, highlighting the ceremonial gestures extended by his hosts.
Ceremony, symbolism, and ongoing challenges
The talks were accompanied by high-profile diplomatic pageantry.
President Lee presented Trump with South Korea’s Grand Order of Mugunghwa, the country’s highest honor, and a replica of a Silla Kingdom royal crown during a ceremony at the Gyeongju National Museum.
The visit featured elaborate displays, including a band performance of Trump’s campaign anthem “Y.M.C.A.” and a lunch showcasing US-raised beef.
While the warm reception underscored improved relations, both sides acknowledged that some issues remain unresolved.
The talks follow Trump’s stops in Japan and Malaysia, where he secured new trade and investment commitments.
In Japan, the government pledged $550 billion in US investments, with $490 billion already detailed by Commerce Secretary Howard Lutnick.
For South Korea, reducing tariffs on autos and semiconductors is a key win, potentially leveling the playing field for Hyundai and Kia, which have been at a disadvantage under the previous 25% US tariff.
However, the lingering effects of a US immigration raid on a Hyundai plant in Georgia earlier this year, which led to the detention of more than 300 South Koreans, continue to strain relations.
As both nations move toward signing the trade deal, the outcome is poised to have significant economic and political implications, signaling a renewed phase of cooperation between Washington and Seoul amid shifting global trade dynamics.
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