Korea, U.S. finalize bilateral trade deal, agree on $350 billion investment details

GYEONGJU, South Korea — Seoul and Washington agreed upon the details of a bilateral trade deal that was at an impasse for weeks as South Korean President Lee Jae Myung and U.S. President Donald Trump held their second bilateral summit in Gyeongju, North Gyeongsang, on October 29.

Kim Yong-beom, the presidential chief of staff for policy, confirmed that the two sides agreed on the “details of a trade deal,” as senior tariff negotiators have struggled to iron out the financing for a $350 billion Korean investment pledge to the United States.

Kim said in a press briefing in Gyeongju that the agreement includes $200 billion in cash investments and $150 billion in shipbuilding cooperation. Seoul set an annual cap of $20 billion in cash toward this pledge, paid in installments over the next 10 years.

The reciprocal tariff rate between the two countries remained at 15 percent, as agreed upon in their tentative bilateral trade deal reached in late July. The tariff on automobiles were also adjusted to 15 percent, matching Japan’s rate.

When asked by a reporter if the United States and Korea reached a trade deal at a dinner banquet in his honor, Trump replied, “We did, we reached a deal, and we did a lot of different things. We had a great session. It’s an honor.”

Seoul and Washington reached a tentative agreement at the end of July for the United States to slash reciprocal tariffs on Korean imports from 25 percent to 15 percent in exchange for the large-scale investment pledge, but follow-up negotiations lasted nearly three months.

Earlier Wednesday, Trump kicked off a two-day state visit to South Korea, on the heels of an Asia trip that took him to Malaysia for the Asean summit and Japan. He arrived on Air Force One escorted by two U.S. F-16 fighter jets.

Lee and Trump last met 65 days ago at the White House in Washington for their first in-person talks in late August. Their reunion comes on the margins of the Asia-Pacific Economic Cooperation (APEC) summit.

This marks the shortest time since a reciprocal visit was made, 147 days after Lee’s inauguration in early June, the presidential office said.

Lee greeted Trump in an official welcoming ceremony at the Gyeongju National Museum, a venue imbued with Korea’s rich cultural heritage near the site of the APEC summit.

Trump arrived at the venue on the “Beast,” his armored limousine, accompanied by a motorcade. Lee greeted Trump at the red carpet, and Trump smiled, shook hands and patted Lee on the shoulder.

The leaders inspected the Korean honor guard and were received by a military band. Trump then signed a guest book and toured a special exhibition at the museum.

Trump was awarded the Grand Order of Mugunghwa, South Korea’s highest national order, becoming the first U.S. president to receive it.

They then viewed a Silla Dynasty (57 B.C.-A.D. 935) golden crown excavated from the Cheonmachong tomb in Gyeongju. Lee later presented a replica of the crown to Trump as a special gift, symbolizing the Silla Dynasty’s longstanding peace, a new era of peaceful coexistence on the Korean Peninsula and shared bilateral growth.

The two leaders headed into a working lunch, flanked by their key aides, to discuss issues including the comprehensive development of the bilateral alliance, including trade, investment, economic and security cooperation. This includes tasks related to modernizing the alliance and establishing peace on the Korean Peninsula.

Lee, during his opening remarks at the luncheon, asked Trump to allow Seoul to secure fuel for nuclear-powered submarines. This comes as South Korea has sought to revise a bilateral nuclear energy pact to allow for reprocessing spent nuclear fuel and uranium enrichment.

“I hope you will make a decision to allow us to have supplies for nuclear-powered submarines,” Lee said, asking Trump to instruct his administration to advance consultations on spent nuclear fuel reprocessing.

Lee said diesel-powered submarines have limited underwater navigation capabilities, restricting the South Korean military’s ability to track North Korean or Chinese submarines. He emphasized that his request is not intended to build nuclear-armed submarines.

However, Trump indicated he will not meet North Korean leader Kim Jong-un this time, despite signaling his willingness to do so.

In the evening, Lee hosted a special presidential dinner for heads of state and government in honor of President Trump, attended by leaders visiting Gyeongju for the APEC summit, including Vietnam, Australia, New Zealand, Canada, Thailand and Singapore.

During the dinner, Trump said Seoul and Washington “pretty much finalized a trade deal.”

He then thanked Lee for rolling out “a beautiful red carpet” and giving him “the honor of that magnificent piece of art,” in reference to the Silla crown.

BY SARAH KIM [kim.sarah@joongang.co.kr]