The United States and South Korea have reached a trade deal, with South Korean goods facing a 15 percent tariff, while US exports will not face duties. US President Donald Trump announced the agreement on his Truth Social platform, amid a blitz of trade-related announcements that also included new US duties on Brazil and India.
Under the deal, South Korea’s car industry will benefit from a lower tariff rate compared to the 25 percent tariff on vehicles and auto parts imposed by Trump. Seoul said it had declined requests for greater US access to its rice and beef markets, a politically fraught issue that has attracted fierce resistance from South Korean farmers. However, the agreement did not lower existing tariffs on steel, aluminium, and copper, which was a blow to South Korea’s steel industry, the world’s sixth largest.
South Korea will contribute $350 billion for investments “owned and controlled” by the US and purchase $100 billion in liquefied natural gas and other energy products. The East Asian country also agreed to invest a “large sum” of money for its own investment purposes, with the amount to be announced “within the next two weeks” during a visit by South Korean President Lee Jae-myung to the White House.
Lee said the agreement “eliminated uncertainties” and ensured that South Korea would pay 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 post on Facebook. “This agreement is the outcome of aligning the US interests in revitalising its manufacturing industry with our determination to expand the competitiveness of our companies in the US market.”
South Korea’s KOSPI rose about 0.4 percent in early trading on Thursday, before dropping nearly 0.9 percent later in the morning. South Korea-listed shares of Hyundai Motor and Kia fell sharply, with the country’s two biggest carmakers down about 3.5 percent and 6 percent, respectively.
The agreement is part of Trump’s efforts to renegotiate trade deals and impose tariffs on countries he believes are unfairly benefiting from trade with the US. Trump has so far announced deals with seven trading partners, including the European Union, Japan, and the United Kingdom. The US and South Korea had faced a deadline of August 1 for the imposition of steep tariffs on dozens of countries.
South Korea’s exports have struggled under Trump’s tariffs, placing a drag on its trade-reliant economy. Exports, which account for more than 40 percent of gross domestic product (GDP), declined 0.03 percent year-on-year in the first half of 2025. The country’s economy is projected to grow by 0.8 percent in 2025, according to the International Monetary Fund, which would be its weakest performance since 2020.