Trump announces trade deal with South Korea, setting tariff at 15 percent

United States President Donald Trump has announced a trade deal with South Korea, the latest agreement unveiled ahead of his August 1 deadline for the imposition of steep tariffs on dozens of countries.

Under the “full and complete” trade deal, South Korean goods will be subject to a 15 percent tariff, while US exports will not face duties, Trump said on his Truth Social platform on Wednesday amid a blitz of trade-related announcements that also included new US duties on Brazil and India.

US and South Korean officials confirmed that the 15 percent rate would apply to vehicles, a win for the East Asian country’s car industry, which had been subject to Trump’s 25 percent tariff on vehicles and auto parts.

Seoul said it had declined requests for greater US access to its rice and beef markets, a politically fraught issue that has attracted fierce resistance from South Korean farmers.

But in a blow for South Korea’s steel industry, the world’s sixth largest, US Commerce Secretary Howard Lutnick said the agreement did not lower existing tariffs on steel, aluminium and copper.

Trump said South Korea would also pay $350bn for investments “owned and controlled” by the US and purchase $100bn in liquefied natural gas and other energy products.

The East Asian country also agreed to invest a “large sum” of money for its own investment purposes, Trump said, with the amount to be announced “within the next two weeks” during a visit by South Korean President Lee Jae-myung to the White House.

“It is also agreed that South Korea will be completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc,” Trump wrote.

Lee, who took office in June after a months-long leadership vacuum prompted by impeached former President Yoon Suk-yeol’s short-lived declaration of martial law, said the agreement “eliminated uncertainties” and ensured that South Korea would pay tariffs at equal or lower levels than its competitors.

“The key is not to pursue unilateral benefits but to derive mutually beneficial results,” Lee said in a post on Facebook.

“This agreement is the outcome of aligning the US interests in revitalising its manufacturing industry with our determination to expand the competitiveness of our companies in the US market. Through this, we anticipate that industrial cooperation between Korea and the US will be further strengthened, and the Korea-US alliance will become even more solid.”

Lee described the $350bn in investments announced by Trump as a “fund” that would support South Korean companies’ entry into the US.

The investments will be directed at industries where South Korea “possess[es] strengths”, Lee said, such as shipbuilding, semiconductors, secondary batteries, biotechnology and energy.

South Korea’s KOSPI rose nearly 0.4 percent in early trading on Thursday, before dropping about 0.9 percent later in the morning.

South Korea-listed shares of Hyundai Motor and Kia fell sharply, with the two biggest carmakers down about 4 percent and 6 percent, respectively, as of 11am local time (02:00 GMT).

South Korea, the US’s sixth-largest trading partner, had faced a 25 percent general tariff from August 1 if it did not reach a deal, in addition to separate duties on steel, aluminium, vehicles and auto parts.

South Korea’s exports have struggled under Trump’s tariffs, placing a drag on its trade-reliant economy.

Exports, which account for more than 40 percent of gross domestic product (GDP), declined 0.03 percent year-on-year in the first half of 2025, according to data from the Ministry of Trade, Industry and Energy.

Asia’s fourth-largest economy is projected to grow by 0.8 percent in 2025, according to the International Monetary Fund, which would be its weakest performance since 2020, when COVID-19 brought much economic activity to a halt.