President Donald Trump announced a sweeping trade agreement with South Korea just hours before a key tariff deadline. The deal secures $450 billion in total commitments and reduces U.S. tariffs on South Korean goods from 25% to 15%.
“I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea,” Trump posted Wednesday on Truth Social.
The agreement includes $350 billion in South Korean investment into U.S.-owned and U.S.-controlled projects. These investments will be selected by Trump himself. An additional $100 billion will go toward purchasing American natural gas and other energy products.
The deal arrives just ahead of Trump’s August 1 deadline. That deadline is part of his broader effort to force one-for-one trade deals that close the U.S. trade deficit. Countries that fail to reach agreements risk facing steep reciprocal tariffs.
South Korea had been under a looming 25% tariff threat. That rate was originally announced under Trump’s “Liberation Day” trade package in April.
Under the new agreement, South Korean exports to the U.S. will face a reduced 15% tariff. In return, the U.S. will face no tariffs when exporting goods to South Korea.
Trump called the deal a win for American manufacturing and energy. “South Korea will be completely OPEN TO TRADE with the United States, and they will accept American product including Cars and Trucks, Agriculture, etc.,” he said.
South Korean President Lee Jae Myung praised the agreement as a strategic move to deepen economic cooperation. “It’s important to achieve mutually beneficial outcomes, not just pursue unilateral gains,” he said.
Lee confirmed that $150 billion of the $350 billion investment will be directed toward shipbuilding collaboration. That money will support Korean companies entering the U.S. market.
“This will play a role in facilitating the active entry of Korean companies into the U.S. market in industries where we have strengths, such as shipbuilding, semiconductors, secondary batteries, biotechnology, and energy,” Lee said. His comments were translated by CNBC from Korean.
Trump thanked South Korea’s trade delegation after meetings at the White House. He emphasized the strengthened alliance between the two nations. “It was an Honor to meet them, and talk about the Great Success of their Country!” he said.
The U.S. trade deficit with South Korea reached $66 billion last year. That marked a 29% increase from 2023. The new deal replaces terms previously set under a 2012 free trade agreement. That earlier deal had largely eliminated tariffs between the two countries.
Trump said the final investment details will be announced when President Lee visits Washington. That visit is expected in the coming weeks.