South Korea and the United States have struck a major trade agreement that slashes tariffs and lays out a massive $350 billion investment plan, with control of the funds resting in Washington.
The deal was revealed by U.S. President Donald Trump, who said Seoul had accepted a 15% tariff on its exports to the U.S.—a reduction from the previously threatened 25%.
In exchange, American goods entering South Korea will face no new tariffs.
While the announcement caught attention globally, South Korea’s government has not entirely echoed Trump’s framing, leading to speculation around how the deal will be executed in practice.
Trump announced the deal in his Truth Social post,
“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. ”
This sum, he claims, will fund infrastructure and manufacturing projects on American soil.
South Korean President Lee Jae-myung, however, offered a more measured interpretation.
In a statement posted on Facebook, Lee explained,
“The $3.5 billion fund included in the total trade agreement announces the basis of bilateral strategic industry cooperation and will help our companies actively enter the US market in industries we have strengths such as steel, semiconductor, two-wheel cell, bio, and energy.”
He clarified that $150 billion would specifically support Korean firms entering the U.S. shipbuilding industry.
Commerce Secretary Howard Lutnick backed Trump’s interpretation, stating “90% of the profits” from the investment would benefit the American people.
A similar claim around a $550 billion investment from Japan was recently challenged by Tokyo, highlighting growing tensions around how these trade investments are structured.
As part of the wider agreement, Seoul will purchase $100 billion worth of U.S. energy exports, including liquified natural gas (LNG).
Trump said more investment details would be released during an upcoming summit with President Lee in Washington, expected within two weeks.
The energy purchase, alongside the broader capital pledge, reflects an evolving alignment of South Korea’s economic strategy with American supply chains.
The deal also opens the door to possible investment in U.S. nuclear technologies, an area not directly confirmed by either side but widely speculated.
Beyond tariffs and cash flows, the agreement touches on digital regulation and tech market access.
U.S. officials raised long-standing concerns about Korea’s digital laws, including data localisation mandates and network usage fees affecting American tech firms.
Seoul reportedly agreed to re-examine these policies, potentially easing the path for U.S. companies like Google and Amazon.
Semiconductors were also at the centre of the negotiations, with both sides looking to strengthen collaboration.
South Korea is a key player in the global chip supply chain, and the deal hints at increased joint investment in chip manufacturing and R&D within the United States.
Samsung and LG executives were involved behind the scenes in Washington prior to the agreement.
Samsung signed a $16.5 billion chip supply deal with Tesla, while LG Energy Solution closed a $4.3 billion battery contract.
Their involvement shows how large Korean conglomerates are now functioning as diplomatic actors, bridging government and business priorities.
Despite the scale of the deal, cryptocurrency markets remain largely unaffected, with no immediate impact noted.
Equity markets, however, did respond.
South Korea’s KOSPI index gained 0.5%, and its 10-year bond yields saw a modest rise.
The muted crypto reaction follows a familiar trend: trade agreements, even when historic in size, rarely shift crypto markets unless digital asset regulations are directly involved.
This agreement highlights a sharp pivot in the structure of modern trade deals.
Instead of focusing solely on reducing tariffs, the U.S. is steering partners toward direct investment strategies that intertwine economics with policy control.
The $350 billion investment, heavily shaped by the White House, represents a new kind of trade tool—one that embeds allies deeper into American production networks.
For South Korea, this may mean access to critical markets and averted trade penalties, but it also increases reliance on U.S. regulatory environments.
Seoul’s role is no longer just that of a partner; it is becoming a contributor to America’s domestic industrial agenda.
This deal is not just about economics—it’s about leverage.
By tying foreign capital to domestic political control, the U.S. has reshaped the way international trade is used as a strategic asset.
The structure of this agreement should serve as a warning to other nations: market access now comes with strings attached, and investment flows are no longer just financial—they're geopolitical.
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