The US and South Korea have agreed on a trade deal with a 15% tariff rate

The US and South Korea have reached a trade agreement that reduces the US tariff on imports from South Korea to 15% instead of the previously promised 25%. President Donald Trump called the agreement “complete and finished” and said it eases tensions with one of the US’s main trading partners and allies in Asia. This was reported by Reuters.

The agreement was announced after negotiations at the White House and less than a day before new tariffs against a number of countries were to take effect. Seoul, one of the leading exporters of microchips, automobiles, and steel, was one of the first countries to agree with Washington on compromise terms.

South Korea agreed to invest $350 billion in the US, including $150 billion in joint shipbuilding projects and another $200 billion in microchips, nuclear energy, batteries, and biotechnology. Korea will also purchase $100 billion worth of US energy resources, including LNG, LPG, and oil. The government emphasized that this is in line with typical import volumes.

According to Trump, South Korean goods, including semiconductors and pharmaceuticals, will not be subject to stricter conditions than those of their competitors. However, the new agreement does not cover steel, aluminum, and copper. In response, Korea agreed not to impose import duties on American cars and agricultural products, although the rice and beef markets will remain restricted.

South Korea’s new president, Lee Jae-myung, who took office in June after early elections, said the agreement reduced uncertainty for exporters. He expects to meet with Trump in Washington within two weeks.

Against the backdrop of the negotiations, Korean companies have stepped up cooperation with American businesses: Samsung has signed a $16.5 billion deal with Tesla to supply chips, and LG Energy Solution has signed a $4.3 billion contract for energy storage batteries.

As a reminder, the EU and the US recently reached a new trade agreement that should stabilize economic relations between the world’s two largest economies. The agreement provides for a fixed customs rate of 15% for most goods exported from the EU. It covers key industries — automotive, pharmaceuticals, microchip manufacturing — and is a “ceiling” with no additional fees, which will provide predictability for businesses on both sides of the Atlantic. Tariffs on aluminum and steel remain at 50%, but there are plans to reduce tariffs and introduce quotas.