South Korea and the United States announced on Wednesday that they had finalized a trade agreement that had been in negotiations for months following a meeting between US President Donald Trump and his South Korean counterpart Lee Jae-myung.
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“We made a deal. We did a lot of different things,” the American leader said, referring to the “great session” in the South Korean city of Gyeongju.
Seoul and Washington were able to finalize a sweeping trade agreement that includes customs duties on automobiles and outlines South Korea's investment obligations, confirmed Kim Yong-beom, a senior adviser to the South Korean president.
According to him, the compromise reached between the American and South Korean presidents includes a reduction to 15% of customs taxes that the two countries charge each other on cars, a plan for South Korean investment of $350 billion in the United States, “including $200 billion in cash and $150 billion for cooperation in the shipbuilding sector.”
“We have basically completed our trade deal and discussed other topics related to national security and so on. And I think we have come to a conclusion on many very important points,” Donald Trump said during a dinner with leaders of the Asia-Pacific Economic Cooperation (APEC).
At the end of July, the American leader announced that he had agreed to reduce customs duties on South Korean products to 15% in exchange for Seoul's commitment to invest $350 billion in the United States and buy $100 billion of American liquefied natural gas (LNG) and other energy sources over the next three to four years.
But car premiums persisted, and the terms of these investments were hotly debated.
The arrest of hundreds of South Korean workers by US immigration police has further strained relations between the two countries.
Seoul was eager to finalize the terms of this important agreement, especially for its auto industry. The US market absorbs half of South Korea's auto exports, accounting for 27 percent of the country's total exports to the US.
The South Korean president also clarified in August that 150 billion of the total planned investment would be for shipbuilding, with the rest for sectors such as semiconductors, batteries, biotechnology and even energy.
South Korea, the world's second-largest shipbuilder just behind China, has focused on the sector in its talks with the United States, whose shipyards are struggling to meet domestic demand and which Donald Trump would like to see strengthened.
