Trump: US and South Korea Reach 15% Tariff Parity Agreement

US President Trump announced on July 30th that he had reached a trade agreement with South Korea. Reportedly, the US will reduce its planned 25% tariff on South Korea to 15% in exchange for a South Korean pledge of $350 billion in investments. Tariffs on South Korean cars will also be reduced to 15%.

Trump announced the news on his social media platform. Regarding the $350 billion in South Korean investments, he added, “American ownership and management.” This statement was not included when announcing the agreement with Japan.

Although the US will reduce tariffs on South Korea from 25% to 15%, Trump insisted that “American products will not be subject to tariffs.”

According to the South Korean presidential office and US Commerce Secretary Mattis Lutnick, the auto tariff will also be the same as the parity tariff, at 15%. The South Korean presidential office also stated that the two sides have agreed not to further open their markets in agricultural sectors such as rice and beef.

The agreement does not address tariffs on steel, aluminum, or copper. The US has pledged to grant South Korea “most-favored-nation” treatment no higher than that afforded to other countries in its upcoming tariffs on semiconductors and pharmaceuticals. This commitment also applies to Japan.

Trump has announced that he will hold a summit with South Korean President Lee Jae-myung at the White House within two weeks. Details of the investment will be announced before then.

President Lee Jae-myung calls it a “major hurdle overcome,” with $150 billion earmarked for shipbuilding.

South Korean President Lee Jae-myung also welcomed the agreement in a statement issued on July 30, saying, “A major hurdle has been overcome. We look forward to further strengthening industrial cooperation between South Korea and the US, which will further solidify the South Korea-US alliance.”

Regarding the $350 billion investment in the US, Lee explained that it is a “fund” established to promote bilateral cooperation in strategic areas such as shipbuilding, semiconductors, batteries, and biotechnology. According to the South Korean presidential office, the fund will primarily take the form of loans and guarantees.

Lee Jae-myung also stated that $150 billion of the funds will be dedicated to the shipbuilding sector, “which will significantly promote the entry of South Korean shipbuilding companies into the US market.” According to Trump and Lutnick, South Korea also pledged to purchase approximately $100 billion worth of liquefied natural gas (LNG) and other energy products from the United States during Trump’s term.