US lowers tariffs on Korea to 15% in return for $350 bil. in investments

A commuter walks past a monitor displaying the conclusion of tariff negotiations between Korea and the United States at Seoul Station in central Seoul, Thursday. Yonhap

Korea and the United States agreed to lower the latter's planned blanket duties on Korean products from 25 percent to 15 percent, Thursday, in return for a $350 billion investment in American industries.

The revised tariff rate is at the same level that Japanese and European products will face in the U.S. market.

The two nations also agreed on a 15 percent tariff on Korean car imports to the U.S., down from the 25 percent which has been already imposed. In addition, Korea will purchase $100 billion worth of liquefied natural gas (LNG) and other energy products from the U.S.

The tariff deal was signed after an unexpected meeting between U.S. President Donald Trump and negotiators from the Korean government at the White House on Wednesday (local time), two days before the beginning of Washington’s imposition of the “reciprocal” tariffs on Korean imports.

"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. The Deal is that South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, as President," he wrote on his social media platform, Truth Social.

Earlier, Japan pledged $550 billion in investment and the European Union, $600 billion.

U.S. President Donald Trump signs a trade deal with Korea at the White House in Washington, D.C., Wednesday (local time). Captured from White House's X account

Saying that Korea will purchase $100 billion of energy products including LNG, Trump added that a forthcoming meeting with President Lee Jae Myung at the White House within the next two weeks will be a venue for the announcement of Korea’s investment of “a large sum of money.”

Shortly after the U.S. president’s announcement, Lee confirmed a deal had been reached.

In a statement shared via Facebook, the Korean president emphasized that the deal was a high-stakes task with tight deadlines and complex international conditions.

“The agreement eliminates key uncertainties facing Korean exporters and ensures U.S. tariff rates on Korean goods are equal to or lower than those faced by Korea’s major export competitors,” he emphasized, adding that Korea can compete on favorable terms in the U.S. market compared to key countries.

Lee also noted that $150 billion out of the $350 billion will be allocated to a dedicated shipbuilding cooperation fund, as Seoul proposed a cooperation initiative dubbed "Make American Shipbuilding Great Again" (MASGA). The Korean government said the cooperation is expected to boost the U.S.' shipbuilding industry as well as helping Korean shipbuilders further advance into the American market.

The remaining $200 billion will be spent on enhancing cooperation between the two countries in other strategic sectors such as semiconductors, rechargeable batteries, biotech and energy.

U.S. Commerce Secretary Howard Lutnick, who was main negotiator from the U.S., said the tariff on Korean cars was set at 15 percent, down from the earlier 25 percent levy.

While Trump said Korea "will accept American product including Cars, Trucks, Agriculture, etc,” Korea's presidential office denied any agreement to lower trade barriers to U.S. beef and rice imports, explaining that about 99.7 percent of the Korean agricultural market is already open to trade with the U.S.

The office also said the latest deal did not include easing regulations on U.S. tech firms, nor Korea’s participation in the Alaskan gas development project and its purchase of LNG from the U.S. state. Currency rates and matters related to defense cost sharing and purchase of U.S. weapons were not on the table either, according to the government.

Additionally, both governments confirmed that 50 percent sectoral tariffs on steel, aluminum and copper will remain unchanged. The U.S. did not lower its metal tariffs in its previous tariff agreements with Japan and the European Union either.

Korea and the U.S. will continue discussions to confirm further details about the tariff deal. They also agreed to keep talking about issues related to nontariff barriers.