President Donald Trump said Wednesday evening that his administration has secured an agreement with South Korea to reduce its reciprocal tariff rate from Aug. 1 in exchange for trade concessions.
The “Full and Complete Trade Deal,” Trump said in a post to Truth Social, will see South Korea “completely OPEN TO TRADE with the United States, and that they will accept American product including Cars and Trucks, Agriculture, etc.”
South Korea had been set to face a 25% tariff from Friday, according to a letter Trump sent to South Korea’s President Lee Jae Myung earlier this month.
As with the other agreements, the deal will also include provisions to boost investment in the U.S. and purchase commitments for U.S. energy products.
“South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself,” Trump wrote. “Additionally, South Korea will purchase $100 Billion Dollars of LNG, or other Energy products.”
Trump added that the South Korean government would make additional investments in the U.S. on their terms. The size of those investments, Trump said, would be determined during Lee’s forthcoming visit to Washington.
The deal lands just two days before Trump’s Aug. 1 deadline for higher country-specific tariffs.
The White House has not published any agreement text or a fact sheet explaining the agreement’s provisions. Of the seven trade arrangements Trump has unveiled since the April 2 tariffs, only one – a pact with the United Kingdom – has been accompanied by text.
Other agreements that have been unveiled, including a with the European Union, still seem to be under negotiation. When the deal was announced on Sunday, European Commission President Ursula von der Leyen told reporters that the U.S. and EU had negotiated “zero-for-zero” treatment on certain agricultural products. But in an explainer published yesterday, this had been modified to tariff-rate quotas for certain U.S. products.
A White House official told Agri-Pulse that both sides would “continue to talk about agricultural products and their barriers.”
Trump also told reporters that the EU had agreed to “open up their countries to trade at zero tariff.” None of the EU documentation has referred to the sweeping elimination of tariffs, nor has it featured in public remarks from EU officials.
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Trump’s pact with Japan includes a similar investment vehicle, according to the White House, in which the Japanese will provide the funding and the U.S. president decides where it is allocated. However, both sides are offering competing descriptions of what this vehicle will look like, with the Japanese describing a non-legally binding agreement that would seek to promote joint investments in Japanese and U.S. companies.
At 15%, South Korea has secured the same tariff rate as the EU and Japan in its negotiations. Only the UK has secured a lower rate at 10% -- but the U.S. records a goods trade surplus with the UK, compared to $66 billion trade deficit with South Korea, a $235 billion deficit with the EU and $69 billion deficit with Japan, according to the Office of the U.S. Trade Representative.
Before Trump took office, South Korea had enjoyed almost duty-free access to the U.S. market under a free trade agreement originally signed in 2007 and revised during Trump’s first term. Accordingly, a 15% tariff marks a substantial tariff hike since Trump took office.
Under the terms of the agreement, South Korea eliminated two thirds its tariffs on U.S. agricultural exports, the Agriculture Department said at the time. U.S. agricultural exports have grown from around $6 billion in 2012 to more than $8 billion in 2024, according to USDA, with beef products alone accounting for around a quarter of that trade.
"We are anxious to learn more details about the U.S.-Korea trade deal," U.S. Meat Export Federation President and CEO Dan Halstrom said in a statement on the deal.
"As the largest export destination for U.S. beef and a critical market for U.S. pork, Korea provides a great example of what the U.S. red meat industry can achieve in the global marketplace," he added. "We remain hopeful that Korea will address the non-tariff barriers it imposes on U.S. beef, bringing market access in line with international standards."
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