S Korea Reduces Tariffs in New Trade Agreement with the US

Fri Dec 05 2025 10:10:58 GMT+0200 (Eastern European Standard Time)

In a recent trade deal, South Korea announced reductions in tariffs on cars and car parts, while maintaining reciprocal tariffs at 15%. This agreement comes as both leaders discussed economic ties during a high-profile meeting.

Following talks between US President Donald Trump and South Korean President Lee Jae Myung, South Korea has agreed to lower tariffs on automobiles as part of a broader trade agreement that includes a significant investment pledge of $350 billion into the US economy. The meeting aimed to solidify economic ties amid rising tensions in international trade and geopolitics.

The US and South Korea have reached a broad trade deal, following discussions between their leaders aimed at strengthening economic ties.

Kim Yong-beom, a presidential aide from South Korea, announced the agreement to maintain reciprocal tariffs at 15%. However, the two countries agreed to lower tariffs on automobiles and car parts, marking a significant step in their trade relations.

As part of this deal, South Korea is set to invest $350 billion in the US, which comprises $200 billion in cash investments and $150 billion earmarked for the shipbuilding industry, according to Kim.

President Trump, currently on a diplomatic tour in Asia, described the trade deal as pretty much finalized after nearly two hours of discussions during a dinner meeting.

This agreement builds on a trade deal announced in July, where South Korea committed to avoiding the harshest tariffs by injecting $350 billion in new investments into the US. However, negotiations had previously reached a stalemate regarding the specifics of those investments.

The two nations have historically maintained a strong alliance, but recent tensions escalated following the detainment of South Koreans in a US immigration raid.

Trump is set to meet with Chinese President Xi Jinping next, as trade discussions continue. The meeting, scheduled during the Asia-Pacific Economic Cooperation (APEC) summit, is anticipated to address ongoing trade issues amid Trump's claim of seeking better agreements for the US economy.

During a ceremonial welcome in South Korea, Trump received a golden crown and the Grand Order of Mugunghwa, the highest honor from South Korea, recognizing his efforts towards peace on the Korean Peninsula.

As international trade dynamics shift, industries in South Korea, particularly electronics, chips, and automotive sectors, are hopeful for clearer guidelines amid the turbulent tariff landscape.