GYEONGJU, South Korea – The United States and South Korea have reached a sweeping trade agreement that will lower tariffs and deepen bilateral investment, officials from both nations confirmed on Wednesday. The accord, announced following nearly two hours of talks between President Donald Trump and South Korean President Lee Jae-myung, is being hailed by both sides as a pivotal step toward stabilizing one of Asia’s most critical economic partnerships.

Under the agreement, reciprocal tariffs between the two countries will fall from 25 percent to 15 percent, a move expected to provide relief to key South Korean industries—particularly semiconductors, automobiles, and consumer electronics—that have struggled under heightened trade pressures.

South Korea will also commit $350 billion in U.S. investments, including $200 billion in direct capital infusions and $150 billion in shipbuilding projects, according to presidential aide Kim Yong-beom.

“We had a tremendous meeting today with South Korea,” President Trump said at a dinner following the talks. “A lot was determined.”

The announcement follows months of tense negotiations, with Washington initially pressing Seoul for expanded commitments in energy purchases and manufacturing investments. Earlier this year, South Korea agreed to buy $100 billion worth of U.S. liquefied natural gas, a pledge that helped soften U.S. demands and reopen stalled discussions.

The deal comes at a sensitive moment in the bilateral relationship. Although the United States and South Korea have long been close allies, recent frictions—including an immigration sweep in the U.S. that saw hundreds of South Koreans detained—had strained public sentiment in Seoul.

Economists in both countries have greeted the agreement cautiously. The Korea Economic Institute in Washington described it as “a pragmatic reset” that could “stabilize trade flows at a time of great uncertainty.” Meanwhile, the Seoul Institute for Global Finance noted that while the tariff reduction would help Korean exporters, “the scale of U.S. investment demands raises long-term questions about capital outflows.”

International reaction has been measured. The Financial Times characterized the deal as “a modest but meaningful breakthrough,” while Japan’s Nikkei Asia highlighted that it “underscores Seoul’s determination to maintain economic alignment with Washington amid intensifying U.S.–China competition.”

President Trump’s Asia tour continues this week, with a high-profile meeting scheduled with Chinese President Xi Jinping on Thursday in Busan, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit. The White House has signaled that the upcoming talks with China could pave the way for a broader recalibration of trade relations across the Pacific.

Speaking to business leaders in Gyeongju ahead of the summit, Trump reiterated his administration’s stance that “economic security is national security.”

“That’s for South Korea, that’s for any country,” he said, adding that global trade rules are “in urgent need of reform.”

President Lee awarded Trump the Grand Order of Mugunghwa, South Korea’s highest civilian honor, in recognition of his “contribution to peace on the Korean Peninsula.” Trump, in turn, quipped that he was tempted to “wear the golden crown” presented to him during the ceremony.

For Seoul, the trade deal represents both relief and risk—an easing of tariff burdens paired with unprecedented investment obligations. For Washington, it marks a fresh assertion of influence in the Pacific, just as the world’s economic centers shift eastward. (zai)