Mutual Tariff Adjustments from 25% to 15%
Automobile Tariff Also Reduced by 15%
$150 Billion Shipbuilding Fund
$200 Billion Fund for Loans and Guarantees
Discussions on Date and Format of U.S.-Korea Summit
[Seoul Economy] The Presidential Office announced on the 31st that the tariff negotiations with the U.S. resulted not only in the reduction of mutual tariffs but also in the decrease of tariffs on Korean-made automobiles to 15%. It was agreed that the domestic rice and beef markets would not be further opened, considering food security and agricultural sensitivity. The office stated, “President Donald Trump has instructed to set up a U.S.-Korea summit ‘even next week,’ and the schedule will be discussed soon.”
At a briefing at the Yongsan Presidential Office, Kim Yong-beom, the Chief Policy Officer, stated, “The mutual tariff of 25% that the U.S. planned to impose on Korea from August 1 will be reduced to 15%. Additionally, the tariff on our main export item, automobiles, has also been lowered to 15%.” Although the Korean side insisted on a 12.5% tariff rate, the U.S. maintained a ‘uniform 15%’ position.
Kim further explained that future tariffs on semiconductors and pharmaceuticals, which had been predicted, would not disadvantage Korea compared to other countries. He acknowledged strong demands from the U.S. for opening the agricultural market but stated, “We agreed not to further open the domestic rice and beef markets.” No additional concessions were made regarding high-precision maps, defense costs, or U.S. weaponry, which were reportedly on the negotiation table.
Regarding the fund of $350 billion to be established as a result of the agreement, Kim mentioned, “The $150 billion U.S.-Korea shipbuilding cooperation fund encompasses shipbuilding, MRO (Maintenance, Repair, Overhaul), and shipbuilding equipment, covering the entire shipbuilding ecosystem.” He added that aside from shipbuilding, a $200 billion investment fund would be created in sectors like semiconductors, nuclear power, secondary batteries, and bio, where Korean companies have competitive advantages. He emphasized that it would present a good opportunity for Korean firms interested in the U.S. market.
President Lee also took to his Facebook, stating, “We have overcome a significant hurdle,” and announced the resolution of the Korea-U.S. tariff negotiations. He highlighted that the government had removed uncertainty in the export environment and ensured that U.S. tariffs are set at or below those of key export competitor countries, thereby creating conditions for competition on equal or superior terms with major nations.
President Lee stressed that the $350 billion fund included in the trade agreement would solidify the foundation for strategic industrial cooperation between the two countries. This fund will support Korean companies’ entry into the American market, especially the $150 billion dedicated to shipbuilding cooperation, which will bolster their entry into the U.S. shipbuilding industry.