US and South Korea Seal Investment Pact, Slash Tariff Rates

U.S. President Donald Trump and South Korean President Lee Jae Myung concluded their trade agreement during the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea. Trump confirmed at a dinner with regional leaders that the deal was “pretty much finalised,” ending months of challenging negotiations.

Investment Commitments and Deal Structure

The allies had earlier unveiled the framework of this agreement, allowing South Korea to avoid major US tariffs by committing $350 billion in new investments in the United States. Both nations agreed to divide the investment into $200 billion in cash instalments, capped at $20 billion annually, and $150 billion for shipbuilding projects to help revitalise the US industry.

Profits will be split evenly before the investments are recouped, and only commercially viable projects will be pursued. US Commerce Secretary Howard Lutnick will head an investment committee to assess opportunities.

Diplomatic Reception and Public Response

Trump received a grand welcome in Gyeongju, where President Lee honoured him with a gold crown and South Korea’s highest decoration, the “Grand Order of Mugunghwa.” 

During their lunch meeting, Lee pledged to increase defence spending and requested U.S. approval for reprocessing nuclear fuel to power submarines. Trump vowed to help “straighten out” South Korea’s issues with its northern neighbour, though a planned meeting with Kim Jong Un did not materialise. 

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Conclusion

The trade breakthrough between the U.S. and South Korea marks a key step toward stabilising global trade relations. With structured investments and upcoming discussions with China, the development highlights renewed diplomatic engagement in Asia, offering prospects for economic cooperation amid regional security and tariff concerns.

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