Factbox: Key Details on U.S.-South Korea Trade Deal

Written by Jihoon Lee and Hyunjoo Jin

SEOUL () - On Wednesday, U.S. President Donald Trump stated that the United States would impose a 15% tax on goods coming from South Korea as part of a deal aimed at preventing more significant duties.

The agreement involves a South Korean investment of $350 billion in the United States, although additional non-tariff obstacles, along with security and currency-related concerns, remained unresolved.

AUTOS

The agreement lowers American tariffs on South Korean vehicles from 25% to 15%, matching the rate applied to imports from Japan and the European Union.

Donald Trump mentioned that South Korea would allow American automobiles and commercial vehicles to enter its market without charging tariffs on them.

The Ministry of Finance states that South Korea currently has no tariffs on manufactured products as part of a free trade agreement.

Seoul mentioned that the nations will keep discussing safety rules for automobile imports coming from the U.S., which Washington has identified as a non-tariff obstacle.

STEEL, CHIPS AND PHARMACEUTICALS

The United States confirmed that South Korean companies would not face an unfair advantage relative to others when new duties on semiconductors and medicines come into effect, while maintaining 50% taxes on steel and aluminum.

INVESTMENTS

Trump claimed that South Korea would put $350 billion into U.S.-based projects that are "owned and managed by the United States" and chosen under his leadership.

South Korea stated that $150 billion has been set aside for collaboration in shipbuilding, with the rest of the $200 billion allocated to investments in semiconductors, batteries, biotechnology, and nuclear energy partnerships.

A significant share of the fund would come from loans and guarantees, with direct investments making up only a minor part, according to South Korean officials, who mentioned that there are also "protections," like buyback assurances, included in the proposal.

When asked about the funding specifics, South Korean presidential advisor Kim Yong-beom stated that the frameworks were yet to be determined and remarked, "uncertainty can be beneficial."

U.S. Commerce Secretary Howard Lutnick stated that 90% of the earnings from these investments would benefit the American public, whereas Kim interpreted this as referring to "reinvestment" within the U.S., rather than bringing funds back overseas.

ENERGY PURCHASES

Donald Trump claimed that South Korea would buy $100 billion in liquefied natural gas or additional energy supplies, with the Asian nation stating this could result in a minor change in energy imports away from the Middle East over the next four years.

Regarding a $44 billion Alaska natural gas initiative supported by Trump, South Korean authorities have shown hesitation, highlighting concerns about the project's viability.

AGRICULTURE

Trump stated that South Korea would allow U.S. agricultural goods to enter its market duty-free.

The South Korean government states that 99.7% of its market is now open, with approximately 10 items excluded, including politically delicate commodities like rice.

Kim stated that there was no consensus to continue expanding the rice and beef markets.

As the largest global importer of American beef, South Korea plans to reduce tariffs to zero by 2026 as part of the free trade agreement; however, it still limits imports from cattle aged over 30 months due to worries about bovine spongiform encephalopathy.

Nevertheless, both nations decided to keep discussing issues related to non-tariff obstacles, including food safety regulations.

DIGITAL SERVICES

The proposed law from South Korea aimed at overseeing internet-based businesses, an issue that had previously caused significant concern for the U.S. during low-level talks, remained unresolved in the final agreement.

The government has several legislative measures aimed at overseeing technology firms both domestically and internationally, including entities like Google, Facebook, and South Korean companies Naver and Kakao. However, the governing Democratic Party has slowed down the progress to facilitate smoother discussions with the United States.

Additional non-tariff obstacles mentioned in the U.S. international trade barriers report, including limitations on exporting geolocation data, were also excluded from the agreement.

SECURITY

Trump has expressed concerns that South Korea needs to contribute more financially for approximately 28,500 American soldiers based in the nation, although officials mentioned that issues related to security were not addressed during these talks.

Rather, these topics will be addressed during a meeting between Trump and South Korean President Lee Jae Myung in the upcoming weeks.

FOREIGN EXCHANGE

During the first stage of trade discussions at the end of April, South Korea reached an agreement with the United States to discuss monetary policies through a distinct communication line involving financial representatives. The U.S. has claimed that certain nations are maintaining their currencies below market value to enhance their trading advantages.

The issue wasn't addressed during the negotiation, stated Finance Minister Koo Yun-cheol, following the cancellation of his planned meeting with U.S. Treasury Secretary Scott Bessent on Thursday, which occurred after the trade talks had ended.

Nevertheless, discussions continued independently of the agreement, as stated by the ministry.

CHINA CURBS

No conversation took place regarding export controls or supply chain limitations aimed at China, like the punitive tariff rates imposed on transshipment activities included in U.S. trade agreements with Vietnam and Indonesia, according to South Korea's Industry Minister Kim Jong-kwan.

This year, South Korea increased its scrutiny of efforts by foreigners to pass off imported goods as locally made exports, following discoveries of violations mainly originating from China.

(Redacted by Jihoon Lee and Hyunjoo Jin; Revised by Ed Davies and Stephen Coates)