South Korea announces reduction of some tariffs as part of new trade deal with US

The United States and South Korea have reached a broad trade deal, both countries announced after talks between their leaders.

South Korean presidential aide Kim Yong-bom said the two countries had agreed to keep reciprocal tariffs at 15 percent, but taxes on cars and auto parts would be reduced.

South Korea will also invest $350 billion in the U.S., including $200 billion in cash investment and $150 billion in shipbuilding, Kim said.

US President Donald Trump, currently on a week-long trip to Asia, said the deal was “pretty much finalized” at a dinner after discussions that lasted nearly two hours. He gave no further details.

“We had a great meeting today with South Korea,” Trump said, adding that “a lot of things were decided.”

“We discussed some other things related to national security and so forth. And I think we came to a conclusion on a lot of very important issues.”

A trade deal was announced at the end of July that will see South Korea avoid the worst tariffs by channeling $350bn (£264bn) of new investment into America. But talks about the structure of these investments are deadlocked.

Both countries have historically been key allies, but tensions rose after hundreds of South Koreans were detained in an immigration raid in the US last month.

Trump will meet his Chinese counterpart Xi Jinping on Thursday on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju.

China’s foreign ministry confirmed the meeting will take place in the city of Busan on Thursday, a short flight from Gyeongju.

The US president said on Wednesday that he was “looking forward” to the meeting.

“We’ve talked a lot over the last month, and I think we’re going to have something that will be very, very satisfying for China and for us.”

It will be the first face-to-face meeting between the two leaders since Trump took office in 2025 and imposed tariffs on every country in the world.

Addressing a group of CEOs in Gyeongju on Wednesday, Trump said he believed the US would “make a deal” with China and it would be a “good deal for both of them”.

He also praised APEC countries for making the global trading system, which he said was “broken” and “in urgent need of reform”, fairer.

“Economic security is national security,” Trump says. “This is for South Korea, this is for every country.”

Before talks with President Lee on Wednesday, Trump was greeted by an honor guard and gifts, including a gold crown.

“I’d like to wear it right now,” Trump had said of the crown.

He also received the Grand Order of Mugungwa, South Korea’s highest honor.

He is the first US president to receive the award, which is given “in recognition of his contributions to peace on the Korean Peninsula,” South Korea’s presidential office said.

Both leaders took part in a working lunch – which was followed by a private meeting in the afternoon, although there appeared to be no concrete deal.

Both sides have previously played down the prospect of a breakthrough in the talks, a fact that will disappoint many in South Korea’s electronics, chip and auto industries who had hoped for some clarity amid the tariff chaos.

Trump imposed a 25 percent tariff on Seoul earlier this year — which Lee was able to negotiate down to 15 percent after Seoul said it would invest $350 billion in the U.S. and buy $100 billion worth of liquefied natural gas.

But the White House later increased its demands as part of trade talks, with Trump pushing for cash investment in the US.

Trump’s arrival in South Korea was preceded by a test launch of surface-to-air cruise missiles by North Korea.

The US president has expressed interest in meeting North Korean leader Kim Jong Un, but noted on Wednesday that his team had not been able to arrange that during his trip.

Noting the long-standing tensions between North and South Korea, Trump said “we’ll see what we can do to iron all of that out.”

And outside the venue where the two leaders met, a small group of anti-Trump protesters gathered Wednesday afternoon, some shouting anti-Trump slogans. Police could be seen forcibly dispersing the crowd and arresting some people.

However, hundreds of others attending a rally in support of Trump – including those who shouted anti-China rhetoric – were also stationed near the venue.

Anti-Chinese sentiment in South Korea has also grown steadily in recent years. Chinese meddling has become a common trope in conspiracy theories about former South Korean President Yoon Suk-yeol.

During his trip to Japan on Tuesday, the US president signed an agreement on rare earth minerals with Tokyo, as well as a document heralding a new “golden age” of US-Japanese relations. This reaffirmed the commitment of both sides to implement agreements reached earlier, including the 15% tariff agreement agreed earlier this year.

Earlier, he attended a meeting of leaders from Southeast Asia, known as ASEAN, in Malaysia. There it is lead a “peace agreement” between Thailand and Cambodia, whose long-standing border dispute erupted into open conflict in July.

With additional reporting by Laura Beeker, China Correspondent and Suranjana Tewari, Asia Business Correspondent