The United States and South Korea have reached a landmark trade deal after months of negotiation, capped by discussions at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.
The agreement reduces U.S. tariffs on South Korean goods from 25% to 15%, particularly benefiting the automotive sector by aligning South Korea’s tariffs with those of Japan and the European Union. Other key industries such as pharmaceuticals, timber, airplane parts, and semiconductors also gain tariff relief or exemptions, while agricultural exports like rice and beef will see improved market access.
South Korea has agreed to invest $350 billion into the U.S. economy, with $200 billion in cash investments distributed in annual instalments capped at $20 billion to protect financial stability, and $150 billion allocated to revitalising the U.S. shipbuilding industry. Projects must be commercially viable, with profits shared equally before investment recovery, and oversight provided by a U.S.-led investment committee.
President Donald Trump hailed the negotiations as “tremendous,” highlighting the close link between economic and national security. Trump was awarded South Korea’s highest civilian honour, the Grand Order of Mugunghwa, for his contributions to peace on the Korean Peninsula, marking a historic diplomatic gesture.
This pact follows prior tensions including U.S. immigration actions and tariff disputes, but signals a realignment in U.S.-South Korea relations amid Asian geopolitical shifts.
While North Korea’s missile tests raised regional security concerns, no meeting occurred between Trump and North Korean leader Kim Jong Un during the visit.