GYEONGJU, South Korea, Oct. 29 (UPI) — South Korea and the United States reached a trade deal during U.S. President Donald Trump‘s visit, Seoul’s top policy official said Wednesday, ironing out the details of a $350 billion South Korean investment pledge that will keep tariffs at 15%.
Kim Yong-beom, presidential chief of staff for policy, announced the deal after Trump and South Korean President Lee Jae Myung met on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju. A final agreement has not yet been signed.
“The $350 billion includes $200 billion in cash investment and $150 billion in shipbuilding and industrial cooperation,” Kim told reporters. “The annual investment cap is set at $20 billion, which is within the capacity of our foreign exchange market. The impact on the market will be minimal.”
The two sides agreed that South Korea would only invest in projects that had “commercial rationality,” Kim added.
Under the terms of the deal, Trump’s so-called “reciprocal” tariffs on South Korean goods, including automobiles, will drop from 25% to 15% as was initially agreed in July.
Kim said that pharmaceutical and lumber products will receive most-favored-nation status and semiconductors — a key South Korean export — will receive tariff rates no less favorable than chief competitor Taiwan.
The investment pledge had been a sticking point between the two sides for months, and expectations were low for a deal to be reached during Trump’s visit.
“The outlook was not bright until yesterday evening, but today there was rapid progress,” Kim said.
Trump arrived in South Korea on Wednesday and was given a lavish welcome. Lee presented him with the Grand Order of Mugunghwa, South Korea’s highest honor, and gave him a replica of a golden crown from the Silla Dynasty, which ruled from 57 BC to 935 AD.
“We had a tremendous meeting with South Korea today,” Trump said during a dinner hosted by Lee. “We pretty much finalized a trade deal.”
The U.S. president’s nearly weeklong trip through Asia has focused on trade and economic cooperation. Earlier this week, he signed an agreement with new Japanese Prime Minister Sanae Takaichi, and over the weekend, he inked deals with Cambodia, Malaysia, Thailand and Vietnam at the Association of Southeast Asian Nations summit in Kuala Lumpur.
Trump is slated to meet Chinese President Xi Jinping on Thursday before returning to Washington. The meeting, their first since 2019, comes as the two superpowers remain locked in a trade war that has roiled global markets.
Speaking at an APEC CEO luncheon earlier on Wednesday, Trump projected optimism ahead of the meeting, saying he believed the two sides would strike a “good deal for both.”