Trump and South Korea Secure Trade Deal

ARCHYDE EXCLUSIVE: South Korea-US Trade Deal Sparks Profit Dispute Amidst Investment Pledges

Seoul, South Korea – A recently announced trade agreement between South Korea and teh United States, lauded by U.S. Commerce Secretary Howard Lutnick as a landmark deal securing “90% of the profits” from South KoreaS $350 billion investment for the American people, has ignited a fiery debate in Seoul.The assertion has drawn sharp criticism from South Korean officials, who contend it misrepresents the nature of the agreement and raises serious questions about profit distribution.The controversy mirrors similar claims made by President Trump regarding a $550 billion investment package with Japan, where Japanese officials emphasized a proportional profit split based on contribution and risk. however, South Korean officials, including Minister of Trade, Industry and Energy Kim Jong-in, are operating under the assumption that the substantial investment will be “re-invested,” rather than unilaterally claimed by the U.S. Minister Kim questioned the fairness of such an arrangement in a typical civilized nation, stressing that specific profit-sharing terms are yet to be finalized and will be steadfast on a “per-project basis.”

South Korean president Lee Jae Myung has positioned the $350 billion investment as a catalyst for growth in South Korea’s shipbuilding, semiconductor, and energy sectors, aiming to bolster their presence in U.S. markets. He articulated on social media that the agreement aligns with America’s manufacturing revival objectives and South Korea’s drive for enhanced competitiveness in the U.S. market, expressing hope for strengthened industrial cooperation and a fortified military alliance.

President Trump’s declaration that South Korea would be “completely OPEN TO TRADE with the United States,” including American cars,trucks,and agricultural products,has also been met with clarification. Minister Kim confirmed that agriculture was not a component of the finalized deal, and crucially, no concessions were made on U.S. rice or beef – persistent points of contention between the two nations. South Korea, a significant importer of American beef, maintains restrictions on beef from cattle older than 30 months due to concerns over mad cow disease. Similarly, rice, a vital crop for South Korean farmers, is protected by substantial tariffs on U.S. imports.”We were able to successfully defend a lot of our positions in those areas,” Minister Kim affirmed, suggesting that South Korea has successfully safeguarded key national interests within the trade framework. The stark difference in the perceived profit distribution and the inclusion of agricultural products highlights ongoing complexities in navigating the economic landscape between the two allies.

How might the strengthened currency manipulation clause in KORUS 2.0 impact the competitiveness of South Korean exports to the US?

Trump and South Korea Secure Trade Deal: A New Era for US-Korea Economic Relations

key Highlights of the Agreement

On July 30th, 2025, former President donald Trump and South Korean representatives finalized a revised trade deal, building upon the existing US-Korea Free Trade Agreement (KORUS FTA). This new agreement, dubbed the “KORUS 2.0” by some analysts, focuses on bolstering key sectors and addressing concerns raised by both nations since the original agreement’s implementation in 2007. The deal’s core components include:

Automotive Sector Adjustments: Meaningful revisions to automotive trade regulations, aiming to reduce the trade deficit the US has historically experienced with South Korea in this sector. This includes phased reductions in tariffs on US automotive products and increased access for American auto manufacturers.

Agricultural Market Access: Expanded access for US agricultural products, especially beef, poultry, and grains, into the South Korean market. This addresses long-standing demands from US farmers and ranchers.

Digital Trade provisions: Modernized provisions for digital trade, including data flows, e-commerce, and intellectual property protection. These updates reflect the growing importance of the digital economy.

Steel and Aluminum Quotas: The agreement establishes quotas for South Korean steel and aluminum imports into the US, replacing the previous tariffs imposed during the Trump administration’s Section 232 investigations.

Currency Manipulation Clause: A strengthened clause addressing currency manipulation, aiming to prevent unfair trade practices and ensure a level playing field for businesses.

Impact on Key Industries

The KORUS 2.0 agreement is expected to have a ample impact on several key industries in both the US and South Korea.

US Automotive Industry

The revised automotive provisions are arguably the most significant aspect of the deal. For years, US automakers have argued that the KORUS FTA did not adequately address non-tariff barriers to entry in the South Korean market. The new agreement aims to rectify this by:

1. Reducing regulatory hurdles for US vehicles.
2. Increasing the number of US-certified automotive parts accepted in South Korea.
3. Providing greater openness in South Korea’s vehicle safety and emissions standards.

This is projected to boost US automotive exports to South Korea and create jobs within the US automotive manufacturing sector.

US Agriculture

The expanded access for US agricultural products is a major win for American farmers. South Korea is a significant importer of agricultural goods, and the KORUS 2.0 agreement will allow US producers to compete more effectively in this market. Specifically, the deal:

lowers tariffs on US beef and pork.

Streamlines import procedures for US grains and other agricultural commodities.

Addresses sanitary and phytosanitary (SPS) barriers to trade.

South Korean Tech Sector

While the deal primarily focuses on goods, the updated digital trade provisions are crucial for South Korea’s thriving technology sector. The agreement’s provisions on data flows and intellectual property protection will help South Korean tech companies continue to innovate and compete in the global market.Specifically, the deal aims to:

Facilitate cross-border data transfers.

Strengthen protections for trade secrets and patents.

Promote interoperability between US and South Korean digital standards.

Ancient Context: KORUS FTA and Subsequent Negotiations

The original KORUS FTA, signed in 2007, was hailed as a landmark achievement in US-South Korea economic relations. Though,concerns quickly emerged,particularly from the US side,regarding the trade deficit and perceived barriers to entry in the South Korean market.

During the Trump administration, tensions escalated, leading to the imposition of tariffs on south Korean steel and aluminum under Section 232 of the Trade Expansion Act of 1962. These tariffs prompted retaliatory measures from South Korea and threatened to derail the entire trade relationship.

Negotiations to revise the KORUS FTA began in 2018, with the goal of addressing these concerns and creating a more balanced and mutually beneficial trade agreement. The finalized KORUS 2.0 represents the culmination of these negotiations.

Geopolitical Implications & US-Korea Alliance

Beyond the economic benefits, the KORUS 2.0 agreement also carries significant geopolitical implications.Strengthening economic ties with South Korea reinforces the US-Korea alliance, a cornerstone of US security policy in East Asia. This is particularly important in the context of rising tensions with North Korea and China.

The deal signals a commitment from both nations to deepen their strategic partnership and work together to address regional challenges. It also demonstrates the potential for the US to forge productive trade relationships with key allies, even in a challenging global trade habitat.

Potential Challenges and Future outlook

Despite the positive aspects of the KORUS 2.0 agreement, several challenges remain.

Implementation: Ensuring effective implementation of the agreement will be crucial. Both nations must work diligently to address any bureaucratic hurdles or regulatory inconsistencies that could hinder trade.

* Political Opposition: The deal may face opposition from certain domestic interest groups in both the US and South Korea who believe their interests have not been