Economic and diplomatic impacts of latest U.S.-S. Korea trade deal

Welcome to Within The Frame, where we bring the most pressing issues across the globe. I'm Kim Mok-yeon.

In a sweeping new trade deal, the United States will slash tariffs on Korean imports from 25% to 15% — a move that takes effect August 7. In return, South Korea is committing to $350 billion in U.S.-bound investments, covering everything from shipbuilding to semiconductors, and $100 billion in American energy purchases.

The agreement ends weeks of uncertainty and marks the first major economic accord under President Lee Jae Myung. He framed the deal as a turning point for Korean exporters and the broader alliance:

"The South Korea-U.S. tariff negotiations have been finalised. With these negotiations, uncertainties in the export environment have been cleared up. I expect that economic cooperation and the alliance between South Korea and the United States will be further strengthened."

With a summit expected within two weeks, we look at what this deal reveals about the new trade order — and what it signals for diplomacy going forward.

For this, we are joined by Min Jeong-hun, professor at the Korea National Diplomatic Academy, in the studio with us. Welcome.

Also joining us from the U.S. is Troy Stangarone, non-resident fellow at the Carnegie Mellon Institute for Strategy & Technology. Good to see you.

Let's start with the big picture, Mr. Stangarone, the tariff agreement was reached just ahead of the deadline, bringing the rate down from 25% to 15%. With investment and LNG deals on the table, how would you assess the overall impact of this deal?

This deal has been deemed as a major test for the Lee Jae Myung administration's "pragmatic diplomacy."

Given the intensity right up to the final hours, I wonder what did you make of the latest deal?

Interestingly, the deal was wrapped up before the scheduled 2+2 ministerial meeting.

What do you think pushed both sides to seal it early — and what part of Korea's offer most appealed to President Trump?

The presidential office has emphasized the expansion of the shipbuilding sector as a standout win.

Prof. Min, do you agree? And could you explain to us the potential gains for both sides?

On the investment side, U.S. Commerce Secretary Howard Lutnick claimed that 90% of the $350 billion fund's returns will go to Americans. Korea's presidential office pushed back.

How should we interpret the gap in perception between the two governments?

Domestically, the biggest concern was agriculture — but Korea successfully avoided further opening of its rice and beef markets.

Can this be seen as a key defensive win in terms of food security and farmer protections?

But in the automotive sector, Korea aimed for a 12.5% rate but settled at 15%.

Does this erode Korea's FTA advantage — and what's the likely impact on Korean auto exports?

Although a broad agreement has been reached, several detailed provisions are still pending further discussions with Washington.

Which specific aspects should we keep an eye on during follow-up negotiations?

And looking ahead — a Korea-U.S. summit is expected within the next two weeks. Trade dominated the current deal, but security issues are likely next.

What key agenda items do you expect at the summit — and if defense cost-sharing comes up, how should Korea prepare?