"South Korea's Foreign Minister announced a deal was reached, promising mutually beneficial trade arrangements with the United States"
The trade deal between South Korea and the United States, finalized on July 30, 2025, sets a 15 percent tariff baseline on South Korean exports to the US, down from a previously threatened 25 percent rate that was scheduled to take effect on August 1, 2025. This new tariff rate applies notably to South Korean autos, which are Korea’s largest export to the US. The deal effectively bypasses the existing U.S.-Korea Free Trade Agreement (KORUS FTA).
Key elements of the deal include:
- Tariffs on South Korean exports to the US are capped at 15 percent, aligning Korea with other major trading partners like the EU and Japan, who have similar tariff arrangements.
- South Korea has agreed to substantial economic commitments, including about $350 billion in investments in the US and purchase agreements such as $100 billion in U.S. liquified natural gas (LNG) and increased purchases of American goods.
- The agreement also includes expanded market access for U.S. cars and agricultural products in South Korea, though South Korea retains exceptions for rice and beef markets, which remain protected.
- A cooperation package on shipbuilding was also unveiled, enhancing industrial collaboration between the two countries.
- The deal is framed as a way to prevent a tariff war between two military allies and safeguard economic ties, following a pattern similar to recent U.S. deals with Japan and the European Union.
The South Korean Foreign Minister, Cho Hyun, expressed his happiness to be back in Delhi and to meet his friends during his visit. Cho Hyun met with External Affairs Minister S Jaishankar during his tenure as Ambassador and again as Foreign Minister. Jaishankar welcomed Cho Hyun back to India and congratulated him on his appointment.
During their meeting, the leaders discussed various issues and explored ways to enhance the bilateral relationship. Jaishankar acknowledged the value India attaches to the relationship with South Korea, while Cho Hyun expressed solidarity with India over the Pahalgam terror attack and its fight against terrorism. Cho Hyun also expressed appreciation for the significant changes made in India under Prime Minister Modi’s leadership during his tenure as Ambassador.
Commerce and Industry Minister Piyush Goyal stated that the Indian government is examining the impact of tariffs and will take necessary steps to safeguard national interest. The United States President, Donald Trump, announced the trade agreement on his social media handle Truth Social.
The meeting between Cho Hyun and S Jaishankar took place on the 10th anniversary of the Special Strategic Partnership between South Korea and India. The meeting marks a significant milestone in the bilateral relationship between the two countries.
[1] South Korea-U.S. Trade Agreement Signed
[2] South Korea and the United States Strike a Trade Deal
[3] Analysis: What the South Korea-U.S. Trade Deal Means
[4] India-South Korea Relations Strengthened
[5] South Korea and the United States Announce Trade Agreement
- The South Korea-U.S. Trade Agreement signed on July 30, 2025, sets a 15 percent tariff baseline on South Korean exports to the US, affecting notably their major export - autos, and bypasses the KORUS FTA.
- The agreement, a potential strategy to prevent a tariff war, includes a cap on tariffs at 15 percent, substantial economic commitments from South Korea, expanded market access, and a cooperation package on shipbuilding.
- An article analyzing the implications of this new trade agreement could explore aspects like its impact on various sectors, the policy-and-legislation changes involved, consequences for domestic and foreign investors, and the role of the agreement in the larger context of global politics and news.
