U.S. and South Korea announce trade deal with investment and tariff cuts

The United States and South Korea released further details of a new trade arrangement on Friday, confirming large-scale South Korean investment in U.S. industries and reduced American tariffs on Korean goods. The announcement follows an October meeting between President Donald Trump and President Lee Jae Myung, during which the two leaders endorsed the framework of the deal.

According to the joint statement, South Korea will invest 150 billion dollars in the American shipbuilding industry and set aside an additional 200 billion dollars for a range of U.S. industrial sectors. The funds will be disbursed after project selections are made by the U.S. president in consultation with Seoul, and each transfer must be completed within 45 days of those decisions. South Korea requested that the 200 billion dollars be released in annual installments of no more than 20 billion dollars to avoid sharp movements in the won, a condition Washington accepted. Both sides also included provisions allowing Seoul to seek adjustments if financial markets show signs of instability.

As part of the agreement, the United States will lower its import duties on South Korean products to 15 percent from 25 percent. Semiconductors will be covered under tariff terms comparable to those offered to Taiwan, according to a presidential adviser in Seoul. South Korea had been concerned about the possibility of higher duties on automobiles and chips, sectors central to its export economy.

The agreement also outlines new areas of cooperation involving shipbuilding, artificial intelligence, and the nuclear industry. A White House fact sheet said Washington has granted approval for South Korea to develop nuclear-powered submarines and will work with Seoul to identify potential fuel supply options. South Korean officials said discussions took place on the basis that such vessels would be built domestically, while earlier statements from President Trump suggested they could be constructed at a Korean-owned shipyard in Philadelphia.

In addition, the United States committed to working with South Korea on ways to enrich uranium and reprocess spent nuclear fuel, expanding cooperation in civilian nuclear energy. Analysts noted that it remains unclear how the arrangement compares with agreements Washington has reached with Europe and Japan, while also observing that the new commitments require Seoul to take on broader defense and energy responsibilities.

The memorandum of understanding signed by Industry Minister Kim Jung-kwan and U.S. Commerce Secretary Howard Lutnick lays out a schedule for implementing the investment projects. Although non-binding, it marks the conclusion of several months of negotiations following the U.S. administration’s tariff measures on multiple trading partners.

President Lee said the agreement resolves a major source of uncertainty for South Korea’s economy, adding that the outcome reflects an opportunity to strengthen economic ties and advance long-term cooperation with the United States.

As Kazinform News Agency reported earlier, in late October Seoul and Washington finalized an agreement on Seoul’s $350 billion pledge in exchange for lower U.S. tariffs during summit talks between President Lee Jae Myung and U.S. President Donald Trump, with final coordination underway to release joint documents.