Trump Announces New US-Korea Trade Agreement: South Korea Agrees to Invest $350 Billion in Exchange for 15% Tariff Treatment

U.S. President Trump Announces New Trade Agreement with South Korea

This morning, U.S. President Trump announced a new trade agreement with South Korea, imposing a 15% tariff on South Korean goods, replacing the previously suspended 25% reciprocal tariff. Although the new rate is lower than the previous peak level, it remains higher than the 10% baseline seen in recent months, indicating the Trump administration’s determination to maintain high tariffs.

Trump further stated that South Korea will pay $350 billion to the United States for investment projects controlled by the U.S. and personally selected by him, highlighting his strong and dominant trade policy style.

This move has a significant impact on the South Korean economy. In the first quarter of this year, South Korea’s GDP contracted by 0.1%, marking the first negative growth in four years. If the previous 25% tariff had been implemented, the economic pressure would have been even more severe. In the face of Trump’s pressure, countries are caught in a dilemma—either compromise to avoid being placed on the “worst violator” tariff list or hold their ground and endure higher import taxes.

So far, major global economies, including China, the European Union, and Japan, have reached some level of tariff agreements with the Trump administration, alleviating concerns about a global trade war. However, Taiwan still has no concrete news regarding a tariff agreement. With the U.S. reciprocal tariff set to take effect on August 1, if there are no breakthroughs in Taiwan-U.S. trade negotiations, Taiwan may face a tariff impact of up to 32%. Bloomberg cited sources familiar with the matter, indicating that the Trump team has currently only offered Taiwan a vague commitment of “optimal tariff rates” (without specifying actual tariff numbers), while simultaneously asking Taiwan to follow the example of Japan, the European Union, and South Korea by increasing investments in the U.S. as a condition for tariff reductions.