This latest announcement comes one day before the Trump administration’s August 1 deadline to reach trade deals with most countries.
After announcing agreements with the UK, Japan and the European Union, President Donald Trump announced some terms of another trade agreement with South Korea late Wednesday evening. This latest framework ensures that tariffs on South Korean imports to the United States will be capped at 15% on most goods, including automobiles.
Just like the Japan and EU agreement, that 15% duty will also carry forward on one of the US’ key trading partners.
Had the nation failed to reach any sort of formal trade deal with the United States, Trump threatened a 25% tariff would go into effect on August 1. Up until this point, that rate already applied to most imported vehicles from South Korea to Japan to Mexico and Canada.
In return for the lower tariffs under this agreement, South Korea will invest $350 billion into the United States. Of that, $150 billion will be allocated to a proposed large-scale shipbuilding industry project. That project involves constructing new shipyards, new ships and bolstering maritime supply chains, among other related concerns. The country also agreed to buy $100 billion of liquefied natural gas from the United States.
Again mirroring the agreement with Japan, Trump said South Korea would bring in American agricultural products and vehicles, though the details on exactly what that entails remain unclear as of July 31.
This latest agreement is a relative boon to several automakers, not least of which include Hyundai, Kia and Genesis. Apart from the homegrown automakers, though, it also will benefit General Motors, which exports the Chevrolet Trax and Trailblazer as well as the Buick Encore and Envista to the United States from South Korea. The Polestar 4, for its part, will also ship out from the Asian nation to America.
At this time, both parties still have to iron out the details to actually formalize a full-scope trade deal. To that end, however, South Korean President Lee Jae Myung will visit Washington in August.
