File picture: US President Donald Trump gestures throughout a joint press convention in South Korea.
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U.S. President Donald Trump on Wednesday introduced that Washington had reached a “Full and Full” commerce take care of Seoul, setting blanket tariffs on the nation’s exports to U.S. at 15%.
This deal implies that duties will probably be lowered from the 25% that Trump had threatened in his “tariff letter” to Seoul earlier this month. Tariffs on the nation’s auto exports set at 25% can even be reduce to fifteen%.
Trump additionally mentioned in his publish on social media platform Fact Social that South Korea “will give to the US $350 Billion {Dollars} for Investments owned and managed by the US, and chosen on my own, as President.”
There seemed to be a distinction within the interpretation between Seoul and Washington on how that quantity can be utilized.
Asserting in a publish on Fb that his nation had “concluded tariff negotiations” with the US, South Korea’s President Lee Jae-myung mentioned that the $350 billion fund “will play a task in facilitating the energetic entry of Korean firms into the US market in industries the place now we have strengths, equivalent to shipbuilding, semiconductors, secondary batteries, biotechnology, and vitality,” based on a CNBC translation of his assertion in Korean.
He mentioned $150 billion of that allocation will probably be for “shipbuilding cooperation offering sturdy help for Korean firms coming into the US shipbuilding trade,” including that “It is necessary to realize mutually helpful outcomes, not simply pursue unilateral good points.”
U.S. Commerce Secretary Howard Lutnick mentioned that “90% of the income” from that $350 billion funding will probably be “going to the American folks.” That is just like what Trump introduced about Japan’s funding within the U.S. as a part of a commerce deal agreed earlier this month, which has reportedly been challenged by Tokyo.
Japan’s authorities mentioned Friday that income from a $550 billion funding agreed within the tariff take care of the U.S. can be divided between the 2 nations primarily based on their diploma of contributions, based on a Reuters report.
Extra investments
Trump on Wednesday additionally mentioned that as a part of the deal, Seoul will buy $100 billion {dollars} of LNG or different vitality merchandise from the U.S, including that Seoul had additionally agreed to take a position “a big sum of cash for his or her Funding functions.” The sum will probably be disclosed when Lee visits Washington for a bilateral summit throughout the subsequent two weeks, he added.
U.S. items is not going to be subjected to any tariffs, Trump mentioned. As of 2024, South Korea’s efficient tariff price for items imported from the U.S. was about 0.79%. Seoul has a free commerce settlement with the U.S. since 2012.
U.S. items commerce with South Korea was just a little over $197 billion in 2024, based on U.S. authorities information, and its deficit with the nation stood at $66.0 billion in 2024, 29.2% increased from a yr earlier.
Lee mentioned in his publish that “I hope that by this, industrial cooperation between Korea and US will probably be strengthened and the alliance between Korea and America can even be strengthened,” whereas including that Seoul will preserve “diplomacy centered on nationwide curiosity” as its high precept.
South Korea will “not be handled any worse than every other nation on semiconductors and prescribed drugs. Metal, aluminum, and copper should not included and stay unchanged,” Lutnick mentioned. Metal, aluminum and copper exports to the U.S. throughout nations face 50% tariffs.
South Korea’s benchmark Kospi index was up 0.5% after the announcement, whereas yields on its benchmark 10-year bonds had been marginally increased.
