GYEONGJU, South Korea — October 29, 2025 — The United States and South Korea have reached a long-anticipated trade and investment agreement worth $350 billion, marking one of the most significant economic developments of U.S. President Donald Trump’s Asia tour. The announcement came Wednesday at the Asia-Pacific Economic Cooperation (APEC) Summit in Gyeongju, following a bilateral meeting between Trump and South Korean President Lee Jae Myung.
According to Kim Yong-beom, South Korea’s presidential chief of staff for policy, the deal secures tariffs at 15% — a reduction from the 25% “reciprocal tariffs” the Trump administration previously imposed on South Korean imports. The agreement, Kim said, reflects months of complex negotiations and will strengthen both nations’ trade and industrial cooperation.
“The $350 billion includes $200 billion in cash investment and $150 billion in shipbuilding and industrial projects,” Kim explained during a press briefing. “The annual investment cap is set at $20 billion, ensuring minimal disruption to our foreign exchange market.”
Deal Balances Investment and Industrial Cooperation
Under the newly finalized framework, South Korea’s investments will target commercially viable projects, aligning with both nations’ strategic industrial priorities. The U.S. will maintain favorable tariff treatment for pharmaceutical and lumber exports, while semiconductors — one of South Korea’s most critical industries — will receive tariff rates comparable to those offered to rival Taiwan.
Kim emphasized that the structure of the agreement was carefully designed to promote “mutual benefit and economic rationality,” addressing U.S. concerns about trade imbalances while supporting South Korea’s export-driven growth.
“This is a pragmatic and balanced deal,” Kim said. “It protects South Korean industry while contributing to U.S. job creation and industrial revitalization.”
A Breakthrough After Months of Deadlock
Expectations for a breakthrough were low just days before Trump’s arrival, with talks reportedly stalled over investment structure and implementation schedules. However, a sudden turn of progress during Wednesday’s closed-door sessions led to the surprise announcement.
“The outlook was not bright until yesterday evening,” Kim admitted. “But today there was rapid progress — both sides showed flexibility and goodwill.”
During a state dinner later that evening, President Lee presented Trump with the Grand Order of Mugunghwa, South Korea’s highest national honor, along with a replica of a golden crown from the ancient Silla Dynasty — symbolizing unity and prosperity.
“We had a tremendous meeting with South Korea today,” Trump told reporters during the dinner. “We pretty much finalized a trade deal — it’s a great day for both of our countries.”
Part of Trump’s Wider Asia Trade Push
The Gyeongju agreement marks another milestone in Trump’s ambitious Asia trade tour, which has seen a flurry of economic pacts designed to strengthen U.S. influence in the region. Earlier in the week, Trump signed bilateral deals with Japan’s new Prime Minister Sanae Takaichi, as well as agreements with Cambodia, Malaysia, Thailand, and Vietnam during the ASEAN Summit in Kuala Lumpur.
The South Korea deal, however, is among the most substantial, signaling deepened strategic cooperation between Washington and Seoul amid regional tensions involving China and North Korea.
Trump’s visit to South Korea also featured ceremonial grandeur, reflecting the importance of the partnership. He was greeted in Gyeongju with a lavish red-carpet welcome, complete with traditional performances and military honors — underscoring Seoul’s effort to reaffirm its alliance with Washington.
Ahead of Xi Jinping Meeting
Following the APEC summit, Trump is scheduled to meet Chinese President Xi Jinping in Busan — their first direct encounter since 2019 — to discuss trade, fentanyl exports, and technology access. The outcome of that meeting could reshape global market expectations, with investors closely watching for signs of détente between the world’s two largest economies.
“We’re very optimistic,” Trump said earlier at an APEC CEO luncheon. “I think we’ll have a good deal for both sides — one that benefits the U.S., China, and the entire Asia-Pacific region.”
Analysts view the U.S.-South Korea trade deal as a strategic stepping stone ahead of the U.S.-China talks, signaling that Washington is securing alliances and commitments across Asia before engaging with Beijing on more contentious economic issues.
Looking Forward
The agreement still awaits formal ratification by South Korea’s National Assembly, but officials from both countries expressed confidence that the process will move quickly. The White House has not yet released detailed documentation but is expected to do so in the coming days.
For Seoul, the deal not only mitigates tariff pressures but also positions the country as a leading investor and manufacturing partner for American industries. For Washington, it represents another tangible outcome in Trump’s push to redefine trade relations in the Indo-Pacific.
If successfully implemented, the $350 billion U.S.-South Korea deal could mark a new phase of industrial cooperation between the two allies — one that balances economic pragmatism with geopolitical strategy in an increasingly divided global economy.
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