President Donald Trump announced a sweeping new trade agreement with South Korea Thursday evening, securing $350 billion in Korean investments into the U.S. economy and committing Seoul to a $100 billion purchase of American energy. The agreement also imposes a 15 percent tariff on South Korean goods, significantly undercutting the country’s long-standing advantages in the U.S. auto market.
The deal comes after weeks of back-channel negotiations and diplomatic maneuvering from South Korea’s newly elected leftist president, Lee Jae-myung, whose administration struggled to gain traction with Washington. A planned meeting between Korean and American finance officials was abruptly canceled last week, but South Korean envoys continued pressing, even flying to Scotland to meet U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer during Trump’s overseas trip.
In a statement on Truth Social, President Trump confirmed the full scope of the agreement. “South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, as President,” he wrote. The agreement also mandates $100 billion in energy purchases and guarantees complete trade openness for American goods.
One major component of the agreement is the launch of a South Korean-backed initiative dubbed “Make American Shipbuilding Great Again” (MASGA), which includes $150 billion for building and revitalizing U.S. shipyards. Korean firms will collaborate with American counterparts to maintain and operate these facilities, marking one of the most aggressive foreign investments in U.S. manufacturing infrastructure in decades.
While the Trump administration dropped demands for greater agricultural access—particularly for beef and rice—South Korean negotiators accepted increased tariffs on auto exports, ending a longstanding exemption under the 2016 U.S.-Korea Free Trade Agreement. Trade Minister Yeo Han-koo acknowledged the new 15 percent rate was “regrettable,” especially as competitors like Japan and the EU face lower tariffs under their own deals.
Experts say the new tariff will hit major Korean automakers Kia and Hyundai, who may be forced to absorb the cost to stay competitive. Meanwhile, critics in South Korea’s conservative People Power Party (PPP) voiced concern over the scale of the investments, arguing they may exceed the country’s foreign currency reserves.
Despite internal political tensions in Seoul, President Trump hailed the deal as a major win for American workers and industries. He also announced a forthcoming White House visit from President Lee and praised the economic and political strides made by South Korea under its new leadership.
