Trump Secures New 15% Trade Deal With South Korea/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump announced a $350 billion trade deal with South Korea ahead of a looming tariff deadline. The agreement imposes 15% tariffs but avoids harsher penalties while boosting U.S. investments in shipbuilding and tech. Economic concerns linger, yet both nations hail the deal as a diplomatic success.
Trump South Korea Trade Deal Quick Looks
- Trump announces trade deal with South Korea before August 1 deadline
- 15% tariffs imposed—lower than threatened 25% level
- $350B investment fund led by U.S. control and selection
- $150B earmarked for shipbuilding partnerships in the U.S.
- Deal avoids harsher penalties for South Korean exporters
- South Korean economy impacted by prior tariff threats
- U.S. to export $100B in energy products to South Korea
- No additional openings in South Korea’s beef and rice markets
Deep Look: Trump Reaches $350 Billion Trade Deal With South Korea Ahead of Tariff Deadline
Just hours before a new round of steep tariffs was set to take effect, President Donald Trump announced a landmark trade agreement with South Korea that averts potentially crippling economic consequences for one of America’s top trading partners.
In a post on Truth Social, Trump declared that South Korea had agreed to a sweeping $350 billion investment deal that allows the U.S. to maintain control over project selection. The deal, he claimed, was a victory for American industry and diplomacy.
“The Deal is that South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself,” Trump wrote.
The agreement imposes a 15% tariff on most goods from South Korea—up from the long-standing 10% baseline but significantly less than the 25% “reciprocal” tariff briefly imposed in April and threatened to return on August 1.
South Korea’s President Lee Jae Myung, who took office just last month after a volatile political transition, echoed Trump’s sentiments in a Facebook post. He credited both governments for reaching the agreement in record time under difficult circumstances.
“We just overcame a big challenge,” Lee said. “Today’s deal eliminated uncertainty in the export environment.”
The $350 billion fund will focus heavily on joint economic initiatives. Of that amount, $150 billion will support U.S.-based shipbuilding, a key interest area for Trump, who has often vowed to restore America’s maritime industry. The fund will help construct new shipyards, train U.S. workers, and strengthen the shipbuilding supply chain with South Korean expertise.
The remaining funds will be distributed among industries like semiconductors, secondary batteries, biologics, and clean energy technologies, further enhancing the U.S.–South Korea tech alliance.
Still, the 15% tariff represents a considerable hike from pre-2025 levels and continues to weigh on South Korea’s economy. South Korea reported a 0.1% GDP contraction in Q1—its first negative growth in four years—partially attributed to tariff uncertainty and strained U.S. trade relations.
Had the 25% tariffs been reinstated, economists warned the damage could have been far worse.
South Korea isn’t alone in navigating this new trade environment. Other nations face a similar binary: comply with Trump’s demands or face heavy tariffs. Brazil, for example, was hit with a 50% tariff this week after refusing U.S. demands in a separate diplomatic standoff involving the trial of former President Jair Bolsonaro.
Goods from the European Union and Japan will also be subject to 15% tariffs starting August 1, despite recent trade agreements. However, these deals provide exemptions or reductions in key sectors like autos and pharmaceuticals.
Commerce Secretary Howard Lutnick confirmed Wednesday that South Korea will enjoy comparable benefits. Cars and car parts exported to the U.S. will face the 15% baseline but won’t see higher sectoral penalties. Steel, aluminum, and copper tariffs, however, remain unchanged.
“South Korea will not be treated worse than any other country on semiconductors and pharmaceuticals,” Lutnick said on X (formerly Twitter).
Lutnick also announced that South Korea will purchase $100 billion worth of liquified natural gas (LNG) and other energy resources from the U.S. over the next 3.5 years. The deal will boost U.S. energy exports and deepen energy ties between the two nations.
South Korea’s Finance Minister Koo Yun-cheol, who helped negotiate the deal in Washington, highlighted the shipbuilding investment as a centerpiece. He called it a direct response to Trump’s agenda of revitalizing American manufacturing.
“This contributed hugely to reaching the deal with the U.S.,” Koo said.
In a separate Thursday briefing, Kim Yong-beom, head of the South Korean President’s policy office, revealed that Trump and President Lee will meet face-to-face within two weeks to formalize and promote the agreement.
Kim also confirmed that Washington had pushed aggressively for expanded access to South Korea’s agriculture markets, particularly rice and beef. However, Seoul resisted those demands.
“Considering the food security and the sensitivity of our agriculture industry, we agreed not to additionally open the domestic rice and beef markets,” Kim stated.
According to U.S. Commerce Department figures, South Korea was the seventh-largest source of imports for the U.S. in 2024, sending $132 billion in goods. Key categories included cars, electronics, and semiconductors. Conversely, the U.S. exported $66 billion in goods to South Korea, primarily in oil, gas, and industrial machinery.
The two countries have a long-standing trade relationship anchored by multiple free trade agreements, including the Korea-U.S. Free Trade Agreement (KORUS), which was revised during Trump’s first term.
Now, with the latest deal signed and a major economic crisis averted, both administrations are moving forward—but with eyes wide open. As Trump’s trade policies continue to reshape global commerce, America’s partners will need to stay nimble, ready to strike deals that balance economic realities with political demands.
