US cuts S. Korea tariffs in trade deal

The United States has reduced planned tariffs on South Korean imports to 15 per cent from a proposed 25 per cent, as part of a major trade agreement aimed at easing tensions with a key Asian ally. The announcement came after President Donald Trump met South Korean officials at the White House, ahead of a self-imposed August 1 tariff deadline.

In return, South Korea will invest $350 billion in the US across sectors, including shipbuilding, semiconductors, nuclear energy, and biotechnology. Of this, $150 billion will go towards shipbuilding and $200 billion to high-tech industries. The investment includes both new and existing commitments, according to South Korean officials.

Trump said South Korea would also buy $100 billion worth of US energy products—such as LNG, LPG, crude oil, and some coal—over the next 3.5 years. Additionally, Seoul has agreed to allow more access for US agricultural and automotive goods, though rice and beef remain protected.

The revised tariff plan comes after South Korea’s new President Lee Jae Myung, elected in June, sought to stabilise trade relations amid domestic political turbulence. The new deal lowers tariffs on South Korean autos to 15 per cent and avoids new restrictions on semiconductor and pharmaceutical exports. Steel, aluminium, and copper are not included in the agreement.

Commerce Secretary Howard Lutnick said 90 per cent of the fund’s profits would benefit Americans, while South Korean officials said reinvestment was expected. The deal follows similar tariff reductions recently granted to Japan, intensifying pressure on Seoul to secure favourable terms.

Meanwhile, South Korean firms Samsung and LG Energy Solution signed multibillion-dollar deals with Tesla as negotiations neared completion.

Attribution: Reuters

Subediting: M. S. Salama