The US and Korea (Rep.) signed a major trade agreement on 29 October 2025.
US President Donald Trump and Korea (Rep.) President Lee Jae Myung released a joint fact sheet regarding the signed trade and investment agreement between the two countries on 13 November 2025.
The US and Korea (Rep.) signed a major trade agreement on 29 October 2025.
The deal reduces tariffs on Korean autos and auto parts from 25% to 15% with retroactive effect from 1 November 2025. In exchange for this tariff reduction, Korea (Rep.) has committed to a USD 350 billion investment in the US. This investment will be structured in two main parts: a direct cash infusion of USD 200 billion and a USD 150 billion investment focused on shipbuilding cooperation.
Additionally, the tariffs on South Korean wood products and pharmaceuticals are capped at 15%, while tariffs on aircraft components and generic drugs will be eliminated, allowing them to enter the US duty-free. Semiconductor trade terms will be at least as favourable as those offered in future comparable agreements.
The two countries also agreed to tackle non-tariff barriers in South Korea’s agriculture and digital services sectors, including market access for US meat, online platform regulations, and cross-border data transfers.
In the energy sector, Korea (Rep.) will not invest in the Alaska LNG project but remains interested in purchasing US energy. Korea Gas signed long-term contracts to purchase 3.3 million metric tons of US liquefied natural gas annually.
Joint Fact Sheet on President Donald J. Trump’s Meeting with President Lee Jae Myung
President Lee Jae Myung of the Republic of Korea (ROK) welcomed President Donald J. Trump of the United States of America (United States or U.S.) for a State Visit to ROK on October 29. This marks the first time in Korean history that a State Visit has been hosted in Gyeongju and follows on the two leaders’ first meeting in Washington on August 25. Notably, it is also the first time that the ROK has welcomed the same leader for a second state visit.
In light of President Trump’s historic 2024 victory and President Lee’s election demonstrating the ROK’s democratic strength and resilience, they declared a new chapter in the U.S.-ROK Alliance, the linchpin for peace, security and prosperity on the Korean Peninsula and in the Indo-Pacific region.
REBUILDING AND EXPANDING CRITICAL INDUSTRIES: President Trump and President Lee reaffirmed the historic announcement in July of The Korea Strategic Trade and Investment deal, which reflects the strength and endurance of the U.S.-ROK Alliance.
- Both leaders welcome Korean investments in various sectors to advance economic and national security interests, including but not limited to shipbuilding, energy, semiconductors, pharmaceuticals, critical minerals, and artificial intelligence/quantum computing.
- This deal includes $150 billion of Korean investment in the shipbuilding sector approved by the United States, which is referred to as the Approved Investments.
- This deal also includes $200 billion of additional Korean investment committed pursuant to the Memorandum of Understanding with respect to Strategic Investments (MOU), which is expected to be signed by representatives of the United States and ROK.
- The United States will apply the higher of either the U.S.-Korea Free Trade Agreement (“KORUS FTA”) or U.S. Most Favored Nation (“MFN”) tariff rate, as applicable, or a tariff rate of 15 percent on originating goods of the ROK, for purposes of the reciprocal tariff provided under Executive Order 14257 of April 2, 2025, as amended.
- The United States will reduce its Section 232 sectoral tariffs on automobiles, auto parts, timber, lumber, and wood derivatives of the ROK to 15 percent. For such products of the ROK with a KORUS FTA or MFN tariff rate, as applicable, equal to or greater than 15 percent, no additional Section 232 tariff shall apply. For such products of the ROK with a KORUS FTA or MFN tariff, as applicable, less than 15 percent, the sum of the KORUS FTA or MFN tariff and the additional Section 232 tariff shall be 15 percent.
- For any Section 232 tariffs imposed on pharmaceuticals, the United States intends to apply to originating goods of the ROK a Section 232 tariff rate no greater than 15 percent.
- For any Section 232 tariffs imposed on semiconductors (including semiconductor manufacturing equipment), the United States intends to provide terms for such Section 232 tariffs on Korea that are no less favorable than terms that may be offered in a future agreement covering a volume of semiconductor trade at least as large as Korea’s, as determined by the United States.
- The United States intends to remove supplemental tariffs imposed pursuant to Executive Order 14257 of April 2, 2025, as amended for certain products identified on the list of Potential Tariff Adjustments for Aligned Partners, such as generic pharmaceuticals, generic pharmaceutical ingredients, generic pharmaceutical chemical precursors, and certain natural resources unavailable in the United States. The United States will also remove tariffs on certain aircraft and parts of the ROK from the tariffs imposed pursuant to Executive Order 14257, as amended, by Proclamation 9704, as amended, Proclamation 9705, as amended, and Proclamation 10962.
PROMOTING RECIPROCAL TRADE: The two leaders recognized that the recently announced deal reflects a common goal to increase mutually beneficial trade and investment. In the spirit of the deal, the United States and the ROK will address non-tariff barriers and memorialize commitments and a plan of action to promote reciprocal trade, to be adopted by the KORUS Joint Committee before the end of the year. This will include but not be limited to the following:
- The ROK will eliminate the 50,000-unit cap on U.S.-originating Federal Motor Vehicle Safety Standards (FMVSS)-compliant vehicles that can enter the ROK without further modifications. The ROK will also reduce regulatory burdens for U.S. automotive exports by not requiring additional documentation in its emissions certification process other than those submitted to U.S certification authorities.
- The ROK will work together with the United States to address non-tariff barriers affecting trade in food and agricultural products, including by: ensuring that existing commitments under bilateral agreements and protocols are met; streamlining the regulatory approval process for agricultural biotechnology products and resolving the backlog of U.S. applications; establishing a U.S. Desk dedicated to requests for U.S. horticultural products; and preserving market access for U.S. meats and cheeses that use certain terms.
- The United States and the ROK commit to ensure that U.S. companies are not discriminated against and do not face unnecessary barriers in terms of laws and policies concerning digital services, including network usage fees and online platform regulations, and to facilitate cross-border transfer of data, including for location, reinsurance, and personal data. Further, the United States and the ROK will support the permanent moratorium on customs duties on electronic transmissions at the World Trade Organization.
- The ROK commits to provide additional procedural fairness provisions in competition proceedings, including the recognition of attorney-client privilege.
- The United States and the ROK will work together to protect intellectual property rights. The ROK will continue to take the necessary steps to accede to the Patent Law Treaty.
- The United States and the ROK commit to work together to ensure strong protection of internationally-recognized labor rights. The United States and the ROK will work together to combat all forms of forced labor globally, including by combatting the importation of goods made with forced labor.
- The United States and the ROK reaffirm the importance of ensuring differences in environmental protection do not distort trade and investment. To this end, the ROK will effectively enforce its environmental laws to facilitate reciprocal trade, including by fully implementing the WTO Agreement on Fisheries Subsidies.
