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President Donald Trump has said the US will charge a 15% tariff on imports from South Korea as part of an agreement with the key Asian trading partner and ally that avoids even higher levies.
The arrangement, announced shortly after Trump met with Korean officials at the White House, came during a blizzard of trade policy announcements ahead of a self-imposed 1 August deadline.
That is when Trump has promised higher tariffs will kick in on US imports from a range of countries. Imports from South Korea, a powerhouse exporter of computer chips, cars and steel, faced a 25% rate.
“I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea,” Trump said on Truth Social on Wednesday.
The South Korean president, Lee Jae Myung, said on Thursday the deal would put South Korea on an equal or better footing compared with other countries.
Lee also said the countries had agreed to set up a $350bn investment fund, out of which $150bn was aimed at a shipbuilding partnership.
In a statement posted to Facebook, Lee called the deal “the first major trade challenge” since his administration took power in June, adding: “We have overcome a major hurdle.”
“Through this deal, the government has eliminated uncertainty surrounding export conditions and ensured that US tariffs on our exports are either lower than or equal to those imposed on our major trade competitors,” Lee said.
The 15% rate is equivalent to levies determined from US trade deals with Japan and the European Union.
Trump had said that as part of the arrangement, South Korea would invest $350bn in the US in projects selected by him and purchase $100bn of liquefied natural gas and other energy products.
It was not immediately clear how the investment deals would be structured or over what time frame. Trump said additional investments would be announced later.
Lee would visit the White House “within the next two weeks” for a meeting with Trump, the US president added.
He also said South Korea would accept American products – including cars, trucks and agriculture – into its markets and impose no import duties on them.
The South Korean presidential office said that under the deal, the US would lower tariffs on South Korean-made autos to 15%, from 25%. It also said computer chips and pharmaceutical tariffs imposed on the country’s US-bound exports would not be worse than other countries, and that South Korea’s rice and beef markets would not be open.
South Korean finance minister Koo Yun-cheol, industry minister Kim Jung-kwan and minister for trade Yeo Han-koo had been in Washington for talks with senior US officials and were believed to have met with Trump shortly before the deal announcement.
Pressure had been mounting on South Korea since Japan clinched a deal to cut Trump’s threatened tariffs to 15% earlier this month.
Amid the last-minute push by government officials to reach a tariff deal, South Korea’s Samsung Electronics inked a $16.5bn chip deal with Tesla.
South Korean battery maker LG Energy Solution also signed a $4.3bn deal to supply Tesla with energy storage system batteries, a person familiar with the matter told Reuters.
In contrast with the 15% tariff for South Korea, Trump on Wednesday also placed 25% tariffs on imports from India and 50% on those from Brazil.
With Reuters and Agence France-Presse
