U.S. President Donald Trump said on Wednesday that the United States will impose a 15% tariff on imports from South Korea, lowering a previously threatened 25% rate, as part of a sweeping new trade agreement that includes $350 billion in investment pledges from Seoul and $100 billion in energy product purchases.
The announcement followed a meeting between Trump and South Korean officials at the White House, just ahead of the August 1 deadline the former president set for raising tariffs on several U.S. trading partners. The deal provides a reprieve for South Korea, a major exporter of chips, automobiles, and steel.
“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,” Trump said on Truth Social.
South Korean President Lee Jae Myung, who took office in June, praised the deal for reducing uncertainty in trade and aligning U.S. tariffs with those of other major economies. “We have crossed a big hurdle,” Lee wrote on Facebook, adding that the agreement would support stability in South Korea’s export markets. Trump also confirmed that Lee is expected to visit the White House “within the next two weeks.”
As part of the agreement, South Korea pledged to invest $350 billion in U.S.-based projects selected by Trump, including $150 billion in shipbuilding and $200 billion in high-tech sectors such as semiconductors, nuclear energy, batteries, and biotech. Kim Yong-beom, policy chief at the South Korean presidential office, said the plan includes both new and existing corporate investments, and that “ambiguity is good,” noting the deal includes safeguards on fund usage.
South Korea also agreed to purchase $100 billion in American energy products such as LNG, LPG, crude oil, and limited coal over 3.5 years. “This is within our usual import volume,” Kim added, suggesting the shift would move sourcing away from the Middle East.
U.S. Commerce Secretary Howard Lutnick emphasized the agreement’s domestic benefits, stating in a post on X: “90% of the profits from the $350 billion fund are going to the American people.” Kim responded by saying South Korea understands this to mean the profits would be reinvested in the U.S.
While the tariff cut covers autos, semiconductors, and pharmaceuticals, key South Korean exports like steel, aluminum, and copper remain outside the agreement. Food regulation discussions are ongoing, and Seoul confirmed it would not open further access to its rice and beef markets.
Former South Korean trade minister Cheong In-kyo called the outcome a compromise. “We avoided the worst and chose the next best,” he said. “Depending how and where $350 billion will be spent, this fund will be looked at differently.”
The deal also comes as South Korean firms strengthen their U.S. ties. Samsung Electronics recently signed a $16.5 billion chip deal with Tesla, and LG Energy Solution agreed to supply $4.3 billion worth of energy storage batteries to the EV maker, according to a source familiar with the matter.
The agreement marks a major early test for President Lee and signals a recalibration of economic ties between Washington and Seoul amid rising global competition in energy and technology.