Trump announces trade deal with South Korea, setting tariff at 15 percent

South Korean leader says agreement eliminates ‘uncertainties’ in trade environment.

United States President Donald Trump has announced a trade deal with South Korea, the latest agreement unveiled ahead of his August 1 deadline for the imposition of steep tariffs on dozens of countries.

Under the “full and complete” trade deal, South Korean goods will be subject to a 15 percent tariff, while US exports will not face duties, Trump said on his Truth Social platform on Wednesday.

US and South Korean officials confirmed that the 15 percent rate would apply to vehicles, a major win for the East Asian country’s auto industry, which had been subject to Trump’s 25 percent auto tariffs.

South Korea will also pay $350bn for investments “owned and controlled” by the US and purchase $100bn in liquefied natural gas and other energy products, Trump said.

The East Asian country also agreed to invest a “large sum” of money for its own investment purposes, Trump said, 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.

“It is also agreed that South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc,” Trump wrote.

Lee, who took office in June after a months-long leadership vacuum prompted by impeached former president Yoon Suk-yeol’s short-lived declaration of martial law, 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. Through this, we anticipate that industrial cooperation between Korea and the US will be further strengthened, and the Korea-US alliance will become even more solid.”

Lee described the $350bn in investments announced by Trump as a “fund” that would support South Korean companies’ entry into the US.

The investments will be directed at industries where South Korea “possess strengths,” Lee said, such as shipbuilding, semiconductors, secondary batteries, biotechnology, and energy.

South Korea’s KOSPI rose on the news, with the benchmark stock index up nearly 0.4 percent in early trading on Thursday.

South Korea, the US’ sixth largest trading partner, had faced a 25 percent general tariff from August 1 if it did not reach a deal, in addition to separate duties on steel, aluminium, vehicles and auto parts.

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, according to data from the Ministry of Trade, Industry and Energy.

Asia’s fourth-largest 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, when COVID-19 brought much economic activity to a halt.