Trump: U.S. to Impose 15% Tariff on South Korea Imports Under New Deal

By Trevor Hunnicutt and Ju-min Park

WASHINGTON/SEOUL () - President Donald Trump stated on Wednesday that the U.S. would impose a 15% tax on goods imported from South Korea, reduced from an initially proposed 25%, as part of an agreement aimed at reducing friction with a major trade partner and significant Asian ally.

The setup was revealed soon after Trump held discussions with South Korean representatives at the White House, occurring amid a flurry of trade-related declarations before an internally set August 1st cutoff date.

This is when Trump has indicated that increased tariffs will take effect on U.S. imports from various nations. Before Wednesday's final-minute agreement, imports from South Korea—known for being a major producer of computer chips, automobiles, and steel—were subject to a 25% tariff.

"I'm happy to share that the United States of America has reached a Comprehensive and Final Trading Agreement with the Republic of Korea," Trump posted on Truth Social.

The talks served as one of the first challenges for South Korean President Lee Jae Myung, who assumed power in June following a surprise election. He stated that the agreement removed ambiguity regarding the exporting conditions and kept U.S. tariffs equal to or below those of key rivals.

"Our team has overcome a major challenge," Lee stated in a Facebook update. Trump mentioned that Lee will be visiting the White House "in the coming two weeks" for his initial discussion with the U.S. president.

South Korean officials have committed to investing $350 billion into the United States through initiatives chosen by Trump, along with purchasing $100 billion worth of energy supplies, according to the American president.

He further stated that South Korea would allow U.S. goods, such as vehicles and agricultural items, into its market without charging any import taxes.

Top officials from South Korea stated that the nation's rice and beef markets will remain closed, with ongoing talks regarding American requests for changes in food standards.

"we escaped the worst outcome and opted for the second-best choice," stated cheong in-kyo, a former south korean trade minister. much will hinge on how the investments directed toward the u.s. are organized, he further noted.

How and where the $350 billion is allocated will influence how this fund is viewed.

DEVIL IN THE DETAILS

The specifics of how the investment agreements would be organized, the sources of funding, the timeline for implementation, and the level of enforceability of their conditions were not immediately apparent. Trump mentioned that further South Korean investments would be disclosed at a later date.

Out of the $350 billion fund, $150 billion was designated for a naval construction collaboration, with an additional $200 billion allocated towards semiconductors, nuclear energy, battery technology, and biomedical research, according to Kim Yong-beom, head of policy at the South Korean presidency, during a press conference.

According to Kim, existing investment strategies from South Korean firms will be included in the fund.

He stated that "uncertainty is beneficial," yet mentioned that they have put in place measures to ensure proper use of the money.

U.S. Trade Secretary Howard Lutnick stated in a message on X that 90% of the earnings from the $350 billion fund are being directed toward Americans.

Kim stated that South Korea interprets it as indicating that earnings will be reinvested.

Energy acquisitions would consist of LNG, LPG, crude oil, and a limited quantity of coal, according to Kim.

"It falls within our typical import range," he stated, noting that this could result in a "small change" in the nation's assortment of imports, moving away from the Middle East toward more products coming from America.

Lutnick mentioned that the energy acquisitions will take place "within the next 3.5 years."

The U.S. duty on South Korean vehicles would amount to 15%, with South Korea's chip and drug exports facing no tougher treatment compared to products from other nations, according to Lutnick. The recent agreement did not include steel, aluminum, or copper.

SCRAMBLE IN SOUTH KOREA

Negotiations occurred amid a volatile political climate in South Korea, where former President Yoon Suk Yeol was ousted in April following his impeachment over an effort to enforce military rule.

South Korea has specifically drawn Trump's attention due to its trade surplus and the expense of sustaining approximately 28,500 American soldiers stationed there to protect against threats from North Korea.

South Korea achieved a new high of $55.7 billion in trade surplus against the U.S. last year, reflecting an increase of 25.4% compared to the previous year.

Only three Asian-Pacific nations have previously established an extensive trade pact with the United States, yet this did not prevent them from facing additional taxes.

Tension has been increasing against South Korea since Japan secured an agreement to reduce Trump's proposed tariffs to 15% earlier this month.

As government representatives made a final effort to secure a trade agreement, Samsung Electronics from South Korea finalized a $16.5 billion semiconductor contract with Tesla.

A source knowledgeable about the situation stated that South Korean battery company LG Energy Solution has entered into a $4.3 billion agreement to provide Tesla with energy storage system batteries.

(Reported by Trevor Hunnicutt and Ju-min Park; Further reports contributed by Joyce Lee, Hyunjoo Jin, Josh Smith, Ed Davies, and Jack Kim in Seoul; Written by Trevor Hunnicutt and Josh Smith; Edited by Stephen Coates)