The United States and South Korea have finalized a massive trade and investment agreement, resolving months of tense negotiations. U.S. President Donald Trump and South Korean President Lee Jae-myung announced the breakthrough on October 29, 2025, during the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju, South Korea.
The centerpiece of the deal is South Korea’s commitment to invest $350 billion into the United States economy. In exchange, the U.S. will lower its tariff rate on key South Korean imports, including automobiles and auto parts, from a threatened 25% down to 15%.
According to South Korean officials, the $350 billion investment package will be structured to protect South Korea’s economy. It includes:
* $200 billion in cash investments, which will be paid in installments capped at $20 billion per year.
* $150 billion in investments specifically directed toward revitalizing the U.S. shipbuilding industry, a key priority for the Trump administration.
This deal formalizes a framework first announced in July 2025, which had stalled over the structure of the payments. South Korean officials had expressed concerns that a large, upfront cash payment could destabilize their economy and foreign currency reserves, leading to the new installment-based plan.
In addition to the investment package, President Trump announced on social media that the deal includes further commitments. He stated that South Korea has agreed to purchase “vast quantities” of U.S. oil and gas, a move that will significantly boost the American energy sector and further diversify South Korea’s energy supply.
President Trump also claimed that separate investments from “wealthy South Korean companies and businessmen” into the U.S. are “expected to exceed $600 billion,” though official details on this separate figure have not been released.
The agreement marks a significant development in the Trump administration’s “America First” trade policy, securing a major influx of foreign investment. For South Korea, it provides crucial stability for its export-driven economy, particularly for its auto industry, by locking in a manageable 15% tariff rate and avoiding a potential trade war.
