South Korea confirms trade deal with US
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The news: South Korea will invest USD350 billion ($530.64 billion) into the US in exchange for reduced tariffs on its car exports to the US, in a deal agreed to by President Donald Trump and South Korean President Lee Jai Myung.
The numbers: During a press conference on Wednesday evening, Lee’s policy chief Kim Yong-beom, said that South Korea pledged a USD200 billion cash investment, which would be capped at USD20 billion annually, and USD150 billion in shipbuilding projects.
The sides agreed to set auto parts tariffs at 15%, putting the South Korean car industry on a more even footing as its Japanese competitors who also face a 15% levy on auto parts exported to the US under its US trade deal.
Kim also said that the US agreed to ensure that any semiconductor tariffs would not disadvantage Korean chip exports relative to exports from Taiwan.
The context: The trade deal is the latest struck by Trump during his tour of South East Asia, having agreed trade pacts with Thailand, Cambodia, Vietnam, Malaysia and Japan.
The deal comes one day ahead of Trump’s highly-anticipated mid-morning meeting with Chinese leader Xi Jinping, where the US President expects to lower tariffs on Chinese goods imposed over the fentanyl crisis and plans to discuss Nvidia’s Blackwell AI chip with Xi.
Australian Prime Minister Anthony Albanese is also in South Korea for the APEC Summit, where he was sat next to Trump for a dinner on the event’s opening night. As Trump concluded his opening remarks at the dinner, he referenced Albanese, stating: “We had a great meeting a week ago … You’ve done a fantastic job,” he told Albanese, patting him on the arm. “We’re working together on rare earths, but we’re working on a lot of things together”, The Australian reported.
The sources: Bloomberg, FT, The Australian
