GYEONGJU, South Korea — October 29, 2025 — U.S. President Donald Trump announced a major breakthrough in trade negotiations with South Korean President Lee Jae Myung on Wednesday, finalizing a long-awaited economic agreement aimed at strengthening bilateral ties and easing trade tensions.
The announcement came on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in Gyeongju, South Korea, as Trump’s high-profile Asia trip continues to reshape the region’s economic and diplomatic landscape.
Historic U.S.-South Korea Trade Deal Reached
Speaking during a dinner with President Lee and regional leaders, Trump confirmed that the two nations had finalized the structure of a landmark trade and investment agreement that had been stalled for months.
“We made our deal — pretty much finalized it,” Trump said proudly during the evening gathering.
Under the terms of the deal, South Korea will invest $350 billion into the U.S. economy, a move designed to offset American tariffs on Korean imports and stimulate job creation in U.S. industries such as shipbuilding and technology.
According to South Korean officials, the investment will be split into two key components:
- $200 billion in cash contributions, paid in annual installments capped at $20 billion per year; and
- $150 billion in industrial investments, primarily focused on rebuilding America’s shipbuilding sector — a central promise of Trump’s economic agenda.
Both governments have agreed that profits from joint ventures will be shared equally (50/50) before the initial investments are fully recouped. U.S. Commerce Secretary Howard Lutnick will oversee a new investment committee responsible for vetting and approving potential projects.
“Prospects were not bright even last night, and there was dramatic progress on the day,” said Kim Yong-beom, South Korea’s top presidential policy chief, signaling a major diplomatic victory for both sides.
The deal, which still requires ratification by South Korea’s National Assembly, is expected to shield Korean industries from the harshest U.S. tariffs while expanding American access to key Asian markets.
A Warm Welcome in Gyeongju
President Trump arrived in South Korea from Tokyo just hours after North Korea test-fired a nuclear-capable cruise missile, but he brushed aside the provocation, saying he was focused on advancing trade and diplomacy.
Trump was greeted with an extravagant welcome ceremony in Gyeongju, a city steeped in Korean history and serving as the 2025 APEC summit host. President Lee presented Trump with the Grand Order of Mugunghwa, South Korea’s highest honor, and a gold crown, symbols of respect and friendship between the two nations.
At a working lunch featuring a “golden dessert,” Lee pledged to boost defense spending and requested U.S. approval to reprocess nuclear fuel for submarine propulsion — a sensitive issue under existing U.S.-Korea agreements.
“We’ll help straighten out South Korea’s problems with its northern neighbor,” Trump assured, referencing ongoing tensions with North Korea, which remains technically at war with Seoul since the 1953 armistice.
Linking Trade and Diplomacy
The timing of the U.S.-South Korea trade deal is significant, coming just ahead of Trump’s highly anticipated meeting with Chinese President Xi Jinping in Busan. The two leaders are expected to discuss tariff reductions, supply chain resilience, and fentanyl-related export controls.
Trump hinted at optimism regarding the upcoming talks with Xi, describing the expected outcome as “good for our country and for the world.”
“I think we’re going to have a very good outcome,” Trump told reporters en route to Gyeongju.
According to U.S. officials, the administration is considering cutting tariffs on Chinese goods by 10% to 20% if Beijing agrees to restrict exports of fentanyl precursors — chemicals fueling the ongoing opioid crisis in America.
China’s foreign ministry responded positively, saying the meeting would “inject new momentum into the development of U.S.-China relations.”
The two nations’ negotiating teams recently outlined a framework for pausing trade escalation, which included China’s commitment to lift rare earth export controls and resume soybean purchases from the United States — steps that drove global stock markets to record highs this week.
Domestic Reactions and Regional Implications
The trade breakthrough was met with a mixture of praise and skepticism both at home and abroad.
Supporters hailed the agreement as a win-win solution that preserves South Korea’s access to U.S. markets while reinforcing Trump’s “America First” economic strategy through massive inbound investments.
Critics, however, accused Trump of leveraging diplomatic pressure for financial gain.
“World leaders and governments are busy flattering Trump and displaying every possible act of diplomatic charm just to persuade him to lower U.S. tariffs by a few percent,” said Kwon Young-guk, a former South Korean presidential candidate, during an anti-Trump protest near the summit venue.
Hundreds of demonstrators gathered outside the APEC conference center, clashing briefly with police as they denounced the administration’s trade tactics.
Still, for many in the business community, the deal symbolizes a stabilizing shift in U.S.-Asia trade relations after years of turbulence.
A New Chapter in U.S.-South Korea Relations
For President Lee Jae Myung, the agreement represents a major diplomatic achievement that balances economic pragmatism with strategic alliance management. His administration emphasized that the investment plan would create mutual growth opportunities while maintaining South Korea’s industrial competitiveness.
A memorandum of understanding detailing the trade agreement is expected within days, according to Lee’s aides, alongside a comprehensive factsheet outlining joint defense, security, and trade initiatives.
The accord also strengthens Seoul’s role as a key U.S. ally in the Indo-Pacific, particularly as regional tensions with China and North Korea intensify.
Outlook: Toward the Trump–Xi Summit
As Trump prepares for his Thursday meeting with Xi Jinping, the success of the South Korea trade deal adds momentum to his Asia tour, which has already reshaped the tone of U.S. economic diplomacy.
The Gyeongju summit has become the stage for major geopolitical shifts — with the United States, South Korea, and China at the center of efforts to stabilize trade, security, and technological cooperation across the Pacific.
If the upcoming Trump–Xi talks deliver even modest progress, the 2025 APEC summit may be remembered as a turning point — not only for easing global trade tensions but also for redefining power balances in the 21st-century economy.
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