Trump unveils last-minute U.S.-South Korea trade deal

President Donald Trump On Wednesday, it was stated that a new trade deal with South Korea involves a fixed 15 percent tax on its products exported to the United States.

Trump announced the information through a statement and on Truth Social, portraying the deal as a significant victory for U.S. industries and energy companies. He additionally mentioned that the recently elected president of South Korea, Lee Jae-myung, is set to pay a visit to the White House in August.

Why It Matters

South Korea ranks as Asia's fourth-biggest economy and remains a strong supporter of the United States. Approximately 28,000 American military personnel are stationed there, making a trade agreement beneficial for strengthening this important partnership.

What to Know

In April, Trump introduced extensive import tariffs on products entering the U.S. from almost all nations, causing widespread turmoil in international financial markets.

Many of the tariffs have now been delayed two times, providing additional opportunity for discussions between nations. Early in July, Trump started distributing letters informing various countries that increased tariffs would be applied to many of them starting August 1.

Trump revealed the pact with South Korea just minutes after its finance minister, Koo Yun-cheol, along with senior officials, met with the president in a bid to wrap up the arrangement by Friday.

South Korea has agreed to a tariff rate of 15%." Trump stated on Truth Social, "The U.S. will not face any tariffs.

Under the agreement, South Korea has pledged to buy $100 billion worth of U.S. energy products and set aside $350 billion for investments that Trump claimed would be "owned and managed by the United States, with selections made by me, as president."

South Korea has committed to being fully open for trade with the United States, agreeing to welcome American products such as vehicles, trucking equipment, and farm commodities.

The arrangement involved a South Korean commitment to purchase $100 billion worth of U.S. liquefied natural gas or additional energy resources, with Trump noting, "South Korea has consented to allocate significant funds for their own investment needs." He continued, "This amount will be revealed within the following fortnight when the President of South Korea, Lee Jae Myung, visits the White House for a Bilateral Discussion."

Later, Commerce Secretary Howard Lutnick posted on X that the automobile tariff rate for South Korea would be established at 15 percent, which is less than the present 25 percent. He also mentioned that South Korea would not face harsher treatment compared to other countries regarding tariffs on semiconductors and medicines.

On July 22, Trump revealed an agreement framework with Japan, Asia's second-biggest economic power, which involved imposing a 15% tax on Japanese products, reduced from a previously proposed 25%. Additionally, Trump mentioned that Japan would commit $550 billion towards investments in the U.S., along with making its market more accessible for American vehicles and rice.

On July 27, the U.S. and the European Union revealed an agreement that features a 15% tax on 70% of products imported from Europe into America, reduced from a potential 30%.

U.S. trade representatives met with Chinese officials, representing Asia's biggest economy and the world's second-largest country, in Stockholm this week. Following the discussions, China's leading trade representative stated that both parties have committed to working towards prolonging the August 12 deadline.

Previously, Trump imposed tariffs on Chinese goods amounting to 145 percent, while China responded with tariffs on American products reaching 125 percent, increasing the risk of a harmful trade conflict. However, on May 12, both parties agreed to a 90-day pause, aiming to reduce these taxes to 30 percent and 10 percent respectively.

As per an agreement revealed on May 8, the United Kingdom will be subject to a 10% standard tax on its merchandise, whereas Trump committed to lowering taxes on British vehicles, iron, and aluminium, along with several additional promises. The UK pledged to decrease charges on American items such as olive oil, wines, and athletic gear.

On July 22, an agreement was made with the Philippines, which involves a 19% tax rate. According to a deal signed on July 15 with Indonesia, products from that country will be subject to a 19% tariff. Goods from Vietnam will incur a 20% US import tax as per a pact disclosed on July 2. Meanwhile, American items will be able to enter Vietnam without any duties.

What People Are Saying

Commerce Secretary Howard Lutnick posted on X: these agreements demonstrate a strong recognition of president trump's approach to tariffs and trade, which holds the potential to transform international business practices.

South Korean President Lee Jae-myung shared a message on Facebook stating: We've overcome a significant obstacle. With this deal, the government has removed ambiguities from the exporting landscape and established circumstances allowing our businesses to vie on fair or better footing against leading nations.

The head of policy at South Korea's presidency, Kim Yong-beom, said to journalists: The U.S. actively advocated for liberalizing agricultural and livestock trade during discussions, yet both parties decided against expanding South Korea's rice and beef market access due to worries about food security and the delicacy of the farming industry.

What Happens Next

The focus will be on whether China and India, which is Asia's third-biggest economy, can secure agreements with Trump.

The Associated Press provided reporting for this story. Contributions to this article came from the Associated Press. This report includes input from the Associated Press. Material for this article was reported by the Associated Press.

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