Ahmet Bedirhan Arvas 
US President Donald Trump announced that a 15% customs duty will be applied to products imported from South Korea under a new trade agreement. According to the statement made by the White House, the new tax rate will come into effect on August 1.
The agreement was reached after months of negotiations by Trump and high-level talks with South Korean President Lee Jae-myung. The parties aimed to reduce trade imbalances and increase mutual investments.
Trump stated, “This agreement is a historic victory for America. We will now acquire Korean goods with reasonable taxes, but in return, we have secured billions of dollars in investment and energy commitments.”
Investment and Energy Package
According to the agreement, South Korea will make an investment of 350 billion dollars in strategic sectors such as semiconductors, shipbuilding, batteries, and nuclear energy in the United States over the next five years. Additionally, the South Korean government and private companies are expected to import 100 billion dollars worth of liquefied natural gas (LNG) and other energy products from the US.
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In return for these investments, the Trump administration secured duty-free access for US products in the South Korean market. This exemption is particularly notable for automobiles and agricultural products.
Following the announcement of the agreement, South Korean automotive giants Hyundai and Kia saw significant declines in their stock prices. Hyundai shares fell by 4.5% on the Seoul Stock Exchange, while Kia dropped by 6.6%. Experts pointed out that rising costs in the US market could negatively affect the competitiveness of Korean companies.
Is the “Tariff Strategy” Continuing?
Trump, in his second term, took a more aggressive approach to trade policies by imposing tariffs on many countries. In February 2025, under the “Liberation Day Tariffs,” customs duties as high as 145% were applied to products imported from China. Tariffs of 25% on South Korea were delayed, and the parties were given a negotiation period.
With the new agreement, South Korea is exempt from these high tariffs. However, trade experts note that pressure may increase on other allied countries, and similar agreements may come to the agenda.
The agreement has been generally well received by industry lobbies in the US, but some are concerned about its long-term effects. Particularly, members of the Democratic Party are uncomfortable with the Trump administration implementing the agreement without Congress’s approval.
On the other hand, concerns are rising in South Korean public opinion as well. Opposition parties argue that the large investment and energy commitments made under pressure from the US could burden the country’s economy.
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