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The United States and South Korea have finalized a trade agreement that lowers auto tariffs and secures South Korean investment in the US.
Some shit you should know before you dig in: Earlier this year, President Trump announced a 25% tariff on South Korean automobile imports, a move that triggered an immediate crisis in South Korea due to vehicles being one of its main exports to the US. In 2024, South Korea exported approximately $118.9 billion worth of goods to the US, while importing $82.6 billion in return, making the US South Korea’s second-largest trading partner.
What’s going on now: In a notable development, President Trump announced that the United States and South Korea have “pretty much” reached a trade deal following high-level talks held during his Asia trip. Standing beside South Korean President Lee Jae Myung at the Asia-Pacific Economic Cooperation (APEC) forum in Gyeongju, Trump described the negotiations as a “great session,” adding that “a lot was determined” and that both nations had come to conclusions on “a lot of very different items.” While Trump did not offer detailed specifics during the press conference, the White House later confirmed key aspects of the agreement through a released fact sheet, indicating that the deal was finalized over a private two-hour dinner meeting between the two leaders.
According to South Korean presidential aide Kim Yong-beom, the core of the deal includes a major reduction in tariffs on South Korean automobile exports to the US (lowering the rate from 25% to 15%). This concession was reportedly secured in exchange for a substantial South Korean commitment to invest $350 billion in the American economy. The investment package includes $200 billion in direct cash payments spread over annual installments of up to $20 billion and another $150 billion earmarked specifically for bolstering the US shipbuilding industry. In addition, the deal includes a $36.2 billion order from Korean Air to purchase 103 Boeing aircraft, a move projected to support up to 135,000 US jobs.
Both sides also agreed to broader economic cooperation beyond tariffs and investments. South Korea committed to purchasing significant quantities of US liquefied natural gas and pledged $3 billion toward modernizing US power-grid infrastructure. The Republic of Korea Air Force will invest $2.3 billion in a joint aircraft development project with an American technology firm, signaling strengthened defense ties as well.
While the full legal text of the agreement has not yet been released, officials from both governments confirmed that all major terms have been agreed upon and the deal is expected to be inked soon.
