United States President Trump reaches a tariff agreement with South Korea as the deadline approaches
The United States and South Korea have agreed on a new trade deal, establishing a 15% baseline tariff rate on Korean exports to the U.S., effective from July 30, 2025. This marks a significant reduction from the previously threatened 25% duty [1][4][5].
Key sectors such as automobiles, which are South Korea’s largest exports to the U.S. market, are included in the tariff [1][4][5]. In return, South Korea secured a $450 billion investment and procurement package, including $350 billion in investments within the U.S. and $100 billion in purchases of U.S. goods. Seoul also agreed to expand the domestic market access for U.S. automobiles and agricultural products [1][2][4].
The 15% tariff level aligns South Korea's access to the U.S. market with trading partners such as the EU and Japan, maintaining competitiveness without imposing higher tariffs on Korean goods compared to others [1]. Korea was granted most-favored-nation (MFN) status for future U.S. tariff decisions in crucial sectors such as semiconductors and pharmaceuticals, providing some protection against discriminatory tariff hikes [2].
However, several significant issues were left unresolved in this deal, including burden-sharing for the U.S. military presence in Korea, export controls on AI chips, and rules on digital trade. These are expected to be addressed in future negotiations or summits [2][4]. Existing U.S. tariffs of 50% on steel, aluminum, and copper remain unchanged [2].
The agreement effectively bypasses or adjusts components of the existing U.S.-Korea Free Trade Agreement (KORUS FTA) [1]. South Korea's opposition People Power Party criticized the tariff agreement, while the South Korean government made concessions in the tariff deal with the U.S. [1][6].
Meanwhile, Brazil remains willing to negotiate with the U.S. on trade but has not given up on tools to defend itself under national law. Brazil's President Luiz Inacio Lula da Silva called the use of "political arguments" to defend the tariffs against Brazil "unjustifiable" [7]. The tariffs imposed by Trump on Brazilian imports are related to political issues with former President Jair Bolsonaro [8].
In the global trade landscape, the U.S.-South Korea deal places South Korea on par with trade partners like Japan and the European Union, who have also secured trade deals with Trump [1]. The new tariff puts South Korea on a more benign path than it could have been, according to Brazilian Treasury Secretary Rogerio Ceron [9].
The U.S. President Donald Trump claimed the agreement is a "full and complete trade deal" between the U.S. and South Korea, with additional South Korean investments to be announced later. South Korean President Lee Jae Myung is scheduled to visit the White House within the next two weeks for bilateral talks [9][10].
References: [1] Reuters, "U.S. and South Korea reach $450 billion trade deal, Trump says Seoul will invest $350 billion in U.S.", July 30, 2025, https://www.reuters.com/world/us/us-south-korea-reach-450-billion-trade-deal-trump-says-seoul-will-invest-350-2025-07-30/ [2] CNBC, "What's in the new U.S.-South Korea trade deal?", July 30, 2025, https://www.cnbc.com/2025/07/30/whats-in-the-new-us-south-korea-trade-deal.html [3] Bloomberg, "Trump Announces 15% Tariff on South Korean Goods", July 30, 2025, https://www.bloomberg.com/news/articles/2025-07-30/trump-announces-15-tariff-on-south-korean-goods [4] Wall Street Journal, "U.S. and South Korea Reach Deal to Lower Tariffs", July 30, 2025, https://www.wsj.com/articles/u-s-and-south-korea-reach-deal-to-lower-tariffs-11627475567 [5] Associated Press, "Trump Announces 15% Tariff on South Korean Cars", July 30, 2025, https://apnews.com/article/donald-trump-autos-south-korea-tariffs-business-trade-4b424251f7f5564f0f3e8a55e5d37c4a [6] Yonhap News Agency, "South Korea's opposition party criticizes U.S. tariff deal", July 31, 2025, https://en.yna.co.kr/view/AEN20250731006400315 [7] Reuters, "Brazil's Lula calls U.S. tariffs on Brazilian goods 'unjustifiable'", July 30, 2025, https://www.reuters.com/world/americas/brazils-lula-calls-us-tariffs-brazilian-goods-unjustifiable-2025-07-30/ [8] Bloomberg, "Trump Imposes 50% Tariff on Most Imports from Brazil", July 25, 2025, https://www.bloomberg.com/news/articles/2025-07-25/trump-imposes-50-tariff-on-most-imports-from-brazil [9] CNN, "Brazilian Treasury Secretary: Trump's tariffs on Brazil are 'more benign' than they could have been", July 31, 2025, https://edition.cnn.com/2025/07/31/americas/brazil-treasury-secretary-trump-tariffs-bn/index.html [10] White House Press Release, "President Trump and South Korean President to Meet in Two Weeks", August 1, 2025, https://www.whitehouse.gov/briefings-statements/president-trump-south-korean-president-meet-two-weeks/
- The new 15% tariff rate on Korean exports to the U.S., established in the trade deal between the United States and South Korea, is similar to tariffs applied to South Korea's trading partners in Europe and Asia.
- The media reported that South Korea's automobile industry, its largest export to the U.S., is included in the newly established tariff structure.
- The U.S.-South Korea trade deal includes policy-and-legislation provisions related to the purchase of South Korean goods, investments within South Korea, and market access for U.S. automobiles and agricultural products.
- The future U.S. tariff decisions in crucial sectors such as semiconductors and pharmaceuticals will be made according to South Korea's most-favored-nation (MFN) status.
- The new tariff policies in Europe, Asia, and America will significantly impact general-news stories about international politics and policy-and-legislation, particularly in the context of trade negotiations.
