US imposes 15% tariffs on South Korea - Trade deal includes $350 billion in US investments
US President Donald Trump announced that Washington had reached a "complete" trade deal with South Korea, setting overall tariffs on the country's exports to the US at 15%.
The deal means tariffs will be reduced from the 25% that Trump threatened in his "letter" to Korea earlier this month. Tariffs on the country's auto exports, set at 25%, will also be reduced to 15%. Trump also said in his post on the social media platform Truth Social that Seoul "will give the United States $350 billion in U.S.-owned or controlled investments."
However, there appeared to be a difference in interpretation between Seoul and Washington over how the money would be used. South Korean President Lee Jae-myung said the $350 billion fund “will play a role in facilitating active entry of Korean companies into the US market in industries where we have strengths, such as shipbuilding, semiconductors, secondary batteries, biotechnology and energy.”
He said $150 billion of this amount would be for “shipbuilding cooperation, providing strong support for Korean companies entering the US shipbuilding industry.” He also added that “it is important to achieve mutually beneficial results, not just aim for unilateral benefits.”
US Commerce Secretary Howard Lutnick said that “90% of the profits” from that $350 billion investment will “go to the American people.” This is similar to what Trump announced about Japan’s investment in the US as part of a trade deal, which Tokyo reportedly opposed. The Japanese government said that profits from a $550 billion investment agreed in the tariff deal with the US would be shared between the two countries based on the scale of their contributions.
Trump also said that as part of the deal, Seoul will buy $100 billion in LNG or other energy products from the US. While American goods will not be subject to any tariffs. As of 2024, South Korea's effective tariff rate on goods imported from the US was about 0.79%.
US goods trade with South Korea was just over $197 billion in 2024, according to US government data, while its deficit with the Asian country was $66.0 billion in 2024, 29.2% higher than a year earlier.
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