S. Korea and U.S. agree to lower 'reciprocal' tariffs to 15%

Today we start with team coverage of the trade accord signed by South Korea and the U.S.

First then our Park Jun-han covers the details of the deal that includes U.S. tariffs lowered to 15 percent for South Korean products.

Do take a listen.

South Korea and the U.S. announced a major tariff agreement on Wednesday, local time, to lower "reciprocal" tariffs from 25% to 15%.

The deal, however, required South Korea to commit to a 350 billion U.S. dollar investment package.

The 350 billion dollars will be in the form of an investment vehicle, and will be spent through equity investments, loans, and credit guarantees.

An additional 100 billion dollars will be spent on purchasing U.S. energy, mostly liquefied natural gas.

The South Korean government said sector-specific tariffs involving semiconductors and pharmaceuticals are guaranteed most-favored-nation status, ensuring treatment as favorable as that afforded to other nations.

So we've made sure that if we face tariffs in the future on things like semiconductors or pharmaceuticals, we'll receive the same treatment as most-favored-nation level, ensuring we're not at a disadvantage compared to other countries' agreements.

Through the deal, tariffs on automobiles have also been reduced from the current 25% to 15%.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol commented after the agreement that South Korea's shipbuilding project — which involves large-scale investments by South Korean private shipbuilders in the U.S. — played a key role in the tariff negotiations.

"The most notable part of today's agreement is the 150 billion U.S. dollars South Korea-U.S. shipbuilding cooperation package, a project called "Make American Shipbuilding Great Again."

This agreement will fund new US shipyard construction, workforce training, supply chain rebuilding, and ship maintenance, leveraging South Korea's shipbuilding expertise.

The remaining 200 billion dollars will be spent to support strategic sectors that are closely related to the country's economic security.

Those sectors include semiconductors, batteries, nuclear energy, biotechnology and critical minerals.

South Korea also pledged to purchase 100 billion dollars worth of U.S. energy, primarily liquefied natural gas, over four years, redirecting existing import needs without any added economic burden.

The last-minute tariffs agreement has reduced uncertainty for South Korean companies, which account for 19% of the country's global exports, ensuring they compete on equal or better terms than their rivals.

Further details about the deal will be finalized in ongoing talks.

Park Jun-han, Arirang News.