Washington: U.S. President Donald Trump announced on Wednesday that his administration has reached an agreement with South Korea to lower the proposed reciprocal tariffs to 15 percent from the initially planned 25 percent. This announcement comes as part of a broader deal involving significant investments and market openings, alongside a scheduled summit with South Korean President Lee Jae Myung at the White House in two weeks.
According to Yonhap News Agency, the deal was revealed by Trump in a social media post following intensive negotiations led by Seoul's Finance Minister Koo Yun-cheol and other top officials. They engaged with Trump to finalize the agreement ahead of a looming deadline, which, if unmet, would trigger the originally planned higher tariffs.
Trump stated on Truth Social, "We have agreed to a Tariff for South Korea of 15%. America will not be charged a Tariff." He further elaborated that under the "full and complete" trade deal, South Korea will contribute US$350 billion for investments within the United States, which are to be "owned and controlled by the United States, and selected by myself."
The agreement stipulates that South Korea will fully open its markets to U.S. trade, accepting a variety of American products, including vehicles and agricultural goods. In addition, South Korea has committed to purchasing $100 billion worth of U.S. liquefied natural gas or other energy products, alongside making substantial investments for its own purposes, details of which will be disclosed during President Lee's forthcoming visit to Washington.
Commerce Secretary Howard Lutnick also communicated via X, formerly known as Twitter, that the auto tariff rate for South Korea will be adjusted to 15 percent, down from 25 percent. He assured that South Korea will not face harsher treatment compared to other nations regarding tariffs on semiconductors and pharmaceuticals. However, tariffs on steel, aluminum, and copper remain unchanged.
Lutnick highlighted that 90 percent of the profits from South Korea's $350 billion investment plan will benefit the American populace. He also noted that Trump and Lee are set to announce substantial investments by South Korean companies in the U.S. during the upcoming White House meeting.
This agreement concludes months of challenging negotiations initiated after Trump's announcement of 25 percent reciprocal tariffs on South Korea in April. In the final negotiation stages, key South Korean figures, including Industry Minister Kim Jung-kwan and Trade Minister Yeo Han-koo, were present in the U.S. to expedite discussions amid fears of negative impacts on South Korea's export-driven economy if steep tariffs were enforced.
Corporate leaders from major South Korean firms, such as Samsung Electronics Co., Hanwha Group, and Hyundai Motor Group, also visited Washington to support negotiations, as the Trump administration pushed for substantial investments from Korean businesses. During talks, South Korea proposed initiatives like "Make American Shipbuilding Great Again," aimed at revitalizing the U.S. shipbuilding industry in response to China's dominant capacity in the sector.