Donald Trump announced the conclusion of a “major” trade agreement with South Korean President Lee Jae-myung during his visit to South Korea. This represents an economic milestone for American policy, with the US President telling reporters “we did it”, while also celebrating the “excellent meeting”. Additionally, Trump confirmed the finalization of cooperation between the two countries during a dinner on the sidelines of the APEC summit, where they discussed national security issues.
What the US-South Korea agreement provides
Notably, the agreement provides for a reduction of customs tariffs to 15% in the automotive sector, as well as an extensive South Korean investment program in the United States worth $350 billion — of which $200 billion will be directed to the digital sector and $150 billion to the shipbuilding industry, according to South Korean President’s economic advisor, Kim Young-beom.
This agreement ends months of difficult negotiations over automotive tariffs, which had remained pending since July. At that time, Trump had already accepted the reduction of tariffs on South Korean products, in exchange for massive Seoul investments in the US and increased purchases of American energy, including liquefied natural gas (LNG). South Korea sought to secure this agreement vital to its economy, as automobile exports to the United States represent nearly half of its foreign sales — that is, 27% of its total exports to the American market.
President Lee had clarified that $150 billion of the total investment would be allocated to the shipbuilding industry, a key sector for Seoul, which constitutes the world’s second-largest shipbuilding power after China. This choice also aligns with Trump’s intention to strengthen the US shipbuilding industry, which faces significant domestic challenges.
Meeting with Xi Jinping
Meanwhile, Donald Trump announced that he will meet tomorrow with his Chinese counterpart, Xi Jinping, for talks lasting three to four hours. This highly anticipated meeting is expected to focus on efforts to de-escalate trade tensions between the two powers. During the same dinner, Trump expressed optimism about improving the situation with North Korea, stating that he “believes in positive developments” in the coming months.
