US-South Korea tariff deal: Reduced duties, nuclear submarines, shipbuilding and more - What's in the new agreement?

South Korea and the US have reached an agreement, covering areas such as nuclear power, tariff concerns, AI and more.

South Korean President Lee Jae Myung on Friday announced that the two nations have finalised a joint face sheet agreement on trade and security issues. The deal with bring down US import duties on South Korean products from 25% to 15%.


"Finally, the South Korea-US trade, commerce, and security negotiations, which were among the biggest variables affecting our economy and security, are ... concluded," Lee said.

"Good competition requires excellent partners, and I believe President Trump's rational decision played a significant role in achieving meaningful agreement,” the South Korean president further added.

Under the agreement, South Korea will proceed with building nuclear-powered submarines and establish a new partnership with the US covering shipbuilding, artificial intelligence and the nuclear industry, Lee said during a televised briefing, as cited by Reuters.

Lee’s national security adviser said that the two sides discussed nuclear submarines on the “premise” that South Korea would be the one to build them. Trump had earlier remarked that the submarines would be produced at a Korean-owned shipyard located in Philadelphia.

Last month, US President Donald Trump and Lee had met in Gyeongju to finalise the deal.

South Korea’s presidential aide, Kim Yong-beom, had earlier announced that the two governments have agreed to cut reciprocal tariffs from 25% to 15%. Kim also said South Korea will invest $350bn (£265bn) in the United States, including $200bn in cash and $150bn dedicated to shipbuilding.

Earlier this year, Trump had imposed a 25% tariff rate on Seoul, which Lee later negotiated down to 15% after Seoul committed the investment in the US and agreed to buy $100bn worth of liquefied natural gas. However as talks continued, the White House raised its demands, with Trump pressing for increased cash investment in the United States.

However, now the countries have reached a “mutual understanding” that Seoul’s investment should not lead to “market instability.”

Even if the signs of market instability occur, South Korea could seek an adjustment in the payments, asking the US to change the amount and the timing of funding.