On July 30, 2025, the United States and South Korea announced a new trade agreement, averting the implementation of a 25% tariff on South Korean imports that was set to take effect on August 1. Under the terms of the agreement, South Korean goods will be subject to a 15% tariff, while U.S. exports to South Korea will remain tariff-free. This deal aligns with similar agreements recently made between the U.S. and other trading partners, including Japan and the European Union.
The agreement also includes provisions for increased cooperation in strategic sectors such as shipbuilding, semiconductors, and energy. South Korea has committed to investing $350 billion in U.S.-owned and controlled projects, with a focus on industries where it possesses competitive advantages. Additionally, South Korea agreed to purchase $100 billion in liquefied natural gas and other energy products from the United States.
South Korean President Lee Jae-myung expressed optimism about the agreement, stating that it eliminates uncertainties and ensures that South Korea will face tariffs at equal or lower levels than its competitors. He emphasized the importance of pursuing mutually beneficial results and aligning U.S. interests in revitalizing its manufacturing industry with South Korea's determination to expand the competitiveness of its companies in the U.S. market.
U.S. Commerce Secretary Howard Lutnick highlighted that South Korean imports, including automobiles, will now face a 15% tariff, a reduction from the previously proposed 25%. He also noted that South Korean companies will not be treated any worse than other countries in sectors such as semiconductors and pharmaceuticals. However, existing tariffs on steel, aluminum, and copper remain unchanged under the new agreement.
This trade deal marks a significant development in U.S.-South Korea relations, providing greater certainty and stability in their economic interactions. It also reflects the Trump administration's ongoing efforts to renegotiate trade terms with key partners to address trade imbalances and promote domestic manufacturing.