President Lee Jae Myung and U.S. President Donald Trump shake hands during a presidential state dinner hosted by Lee in the Grand Ballroom of the Hilton Hotel in Gyeongju, North Gyeongsang Province, on October 29. (Yonhap)
GYEONGJU, South Korea, Oct. 29 (Korea Bizwire) – South Korea and the United States announced a finalized tariff agreement on Wednesday, ending months of contentious negotiations and signaling a deepening phase in their industrial partnership.
President Lee Jae Myung and President Donald Trump confirmed the deal during talks held on the sidelines of the Asia-Pacific Economic Cooperation summit in Gyeongju. The agreement cements the structure of Seoul’s $350 billion investment pledge in the United States and reduces American tariffs on Korean autos and parts.
Under the terms, the United States will maintain its “reciprocal” tariff system but lower duties on Korean-made vehicles to 15 percent from 25 percent. In return, Seoul will channel large-scale investment into U.S. manufacturing, particularly shipbuilding, an area Trump has repeatedly vowed to revive.
President Lee Jae Myung looks on as U.S. President Donald Trump signs the guestbook at the Gyeongju National Museum, the venue for the South Korea–U.S. summit, on October 29. (Photo courtesy of the presidential office)
The negotiations were complicated by South Korea’s political turmoil last year, after the impeachment of former President Yoon Suk Yeol left a leadership void that slowed trade progress. Talks accelerated following Lee’s election in June and a last-minute framework agreement in July, just before a deadline set by Washington.
Even with the framework in place, both governments sparred for weeks over how Seoul’s investment would be financed and how profits would be shared. The United States pushed for upfront cash, while South Korea sought flexibility through indirect support such as credit guarantees.
Kim Yong-beom, the presidential chief of staff for policy, said the final plan divides the $350 billion commitment into $200 billion in cash installments and $150 billion earmarked for joint shipbuilding projects, with an annual cap of $20 billion.
Profits will be split evenly until South Korea recovers its investment. The memorandum of understanding will also include provisions to ensure “commercial rationality,” addressing concerns that political pressure could distort business decisions.
Tokyo’s recent $550 billion U.S. investment pledge added urgency for Seoul to close the deal, officials said.
Kim Yong-beom (R), the presidential chief of staff for policy, alongside National Security Adviser Wi Sung-lac, speaks during a press briefing at the International Media Center for the Asia-Pacific Economic Cooperation gathering in the southeastern city of Gyeongju on Oct. 29, 2025. (Pool photo) (Yonhap)
Speaking earlier at the APEC CEO Summit, Trump described South Korea’s chief negotiator, Industry Minister Kim Jung-kwan, as “very tough,” adding that American officials sometimes wished they had a “lesser caliber” counterpart across the table.
South Korean officials say the breakthrough came when Seoul proposed a bilateral shipbuilding initiative, branded “Make American Shipbuilding Great Again,” tailored to Trump’s industrial agenda.
The agreement positions South Korea to compete on more equal terms in the U.S. market while reinforcing Washington’s push for allies to invest more heavily in American manufacturing. Whether the economic benefits match the political ambitions attached to the deal will likely become a central issue as implementation unfolds through the end of the decade.
President Lee Jae Myung welcomes U.S. President Donald Trump upon his arrival at the Gyeongju National Museum, the venue of the South Korea–U.S. summit, on October 29. (Photo courtesy of the presidential office)
M. H. Lee (mhlee@koreabizwire.com)
