Catenaa, Wednesday, October 29, 2025- US President Donald Trump announced on Wednesday that the US and South Korea have reached a trade deal related to tariffs and investments.
According to details released by South Korea’s chief policy advisor, Kim Yong-beom, Washington and Seoul agreed to set tariffs on US imports of Korean auto and auto parts at 15%, down from the current 25%, to put them on par with their Japanese competitors, who also pay 15% after Tokyo reached a deal with the US.
South Korean manufacturers of wood products and pharmaceuticals will face the lowest tariffs among countries, while aircraft parts and generic drugs will face zero tariffs.
South Korean chipmakers will “not be put at a disadvantage compared to their Taiwanese competitors,” Kim added.
Seoul was also able to successfully defend additional market openings for agricultural products, including rice and beef.
The two countries agreed to split a promised $350 billion investment fund into $200 billion in cash to be paid in phased installments and capped them at $20 billion per year.
The phased installments would allow the dollar-won onshore market to remain stable despite the outflow, as the Bank of Korea recently said that $20 billion a year would probably be the maximum Seoul can afford to provide without affecting the forex market.
The remaining $150 billion would be for shipbuilding cooperation and would include guarantees as well as investments by South Korean companies and ship financing. This would reduce burdens on the South Korean foreign exchange market as well as increase chances of South Korean companies winning orders, Seoul said.
The deal’s structure is similar to the one that Japan and the U.S. struck in September, but South Korea managed to secure more safeguards to cushion any potential shock to the domestic foreign currency market, for example, the $20 billion annual limit, Kim said.
