U.S. and South Korea Strike Landmark Trade Deal: A $350 Billion Pact

The United States and South Korea have reached a pivotal trade agreement, resolving tariff disputes and securing a $350 billion investment. The revised pact includes reducing car tariffs from 25% to 15%, benefiting companies like Hyundai and Kia. This accord boosts the Korean won and ensures economic growth for both nations.

The United States and South Korea have successfully reached a crucial trade agreement during a summit between their leaders, ending a deadlock that had threatened South Korea's export-driven economy. Under the terms of the deal, South Korea will make a $350 billion investment in the U.S., resulting in reduced import duties on South Korean goods.

The agreement notably lowers tariffs on Korean automobiles and auto parts from 25% to 15%, aligning them with Japanese competitors. This move is significant for major carmakers like Hyundai and Kia, who view the U.S. as a key market. Hyundai expressed appreciation for the efforts made by both governments to eliminate business uncertainties and foster a positive trade environment.

The trade pact announcement, a joint effort by President Trump and South Korean President Lee Jae Myung, immediately strengthened the Korean won, which rose by 0.54% against the dollar. Economists highlight that resolving the prolonged tariff issue was crucial to stabilizing South Korea's currency and maintaining its automotive sector's competitiveness in the U.S. market.

(With inputs from agencies.)