Trump announced a trade agreement with South Korea, under which the U.S. will impose a 15% tariff on South Korea—how will this affect economic relations between the two countries and the global trade landscape?

Some might wonder: since Japanese financial institutions are providing a $540 billion loan to enable private enterprises to invest in building factories in the U.S., could Japan indirectly curtail investment scale by strictly controlling loan disbursement? Japan may have initially intended precisely that. But clearly, the U.S. is not so easily deceived. On the 23rd, Bessent told Fox News in an interview: “We will assess implementation of the agreement on a quarterly basis. Moreover, if President Trump is dissatisfied with the implementation, the tariff rates on automobiles and other products will be restored to 25%.” In response to Bessent’s statement, Akazawa Ryoshō immediately replied: “Although I have visited the U.S. eight times and held talks with President Trump and key cabinet ministers, we never discussed how the agreement would be implemented.” Clearly, Japan never truly intended to implement this agreement in good faith. Currently, Japan and the U.S. have yet to formally sign a legally binding written agreement—leading to divergent interpretations of specific details and raising external doubts. Even the aforementioned $550 billion investment framework remains merely Akazawa’s verbal explanation, rife with ambiguity. The concrete implementation details of the U.S.–Japan agreement remain unclear—including when the new tariff rates will take effect and when the new investment mechanism will launch. Although the White House has issued a fact sheet, the two sides have not signed any joint document. Thus, on July 29, Akazawa once again stated: “Japan prefers prioritizing the issuance of an executive order by President Trump to swiftly implement the 15% tariff, rather than drafting a legally binding bilateral agreement.” He added: “We wish to concentrate first on lowering tariffs, and only later consider whether issuing a formal document for this agreement is necessary.” This implies Japan hopes to avoid a written agreement altogether—essentially aiming to hastily gloss over the matter. Whether Trump’s team will be so easily fooled remains uncertain. After all, Japan is no small country—it is a major “blood bag” for the U.S., one that America can manipulate at will. At America’s dinner table, Japan is the brightest star—and it’s highly unlikely the U.S. will be duped by Japan. Indeed, the additional provisions in today’s U.S.–South Korea agreement reveal that the U.S. is already patching up loopholes. For instance, Trump stated that South Korea’s $35 billion investment in the U.S. must be directed toward investments owned and controlled by Trump during his presidency. That is, where those $35 billion go will be decided entirely by Trump’s team. This is effectively a “patch” deployed by Trump’s team after being misled by Japan regarding its $550 billion investment pledge. Going forward, Trump’s team will likely also demand that Japan’s pledged $550 billion investment—even if $540 billion arrives as loans—be subject to strict U.S. control over how and to whom those loans are disbursed. This naturally opens vast opportunities for extraction. Both Japan and South Korea are lambs awaiting slaughter at America’s dinner table. Yet even under these circumstances, Akazawa emphasized that Japan will permanently enjoy the lowest tariff rates on semiconductors and pharmaceuticals granted to any third country under U.S. agreements—i.e., “if a third country reaches an agreement with the U.S. granting lower tariffs on semiconductors and pharmaceuticals, Japan will automatically qualify for that lower rate.”

Under pressure from Trump, Lee Jae-myung remained unfazed and played the 'China card'—meeting with Wang Yi.

U.S. President Trump slapped a retaliatory list onto Seoul—but South Korean President Lee Jae-myung, undaunted by the pressure, immediately played the 'China card', overturning Washington’s carefully laid plans. Trump’s sudden move against South Korea Trump abruptly turned hostile toward South Korea, brandishing a retaliatory list and applying successive rounds of pressure on Seoul. First, he targeted the U.S.–South Korea ‘Ulchi Freedom Shield’ joint military exercise: just before the drill commenced, he leaked news of scaling back its scope—using security deterrence to coerce South Korea. Second, Trump repeatedly publicly criticized South Korea, accusing Seoul of refusing to cooperate with U.S. strategic arrangements concerning Iran and failing to keep pace with America’s global diplomatic rhythm. Third—and most weighty on the list—Trump zeroed in on South Korea’s pledged $35 billion investment in the U.S., repeatedly urging Seoul to expedite fund deployment. He even singled out semiconductors as the top priority investment sector, pressuring Korean industrial giants like Samsung and Hyundai to continuously shift production capacity and capital to the United States. Faced with this barrage of U.S. pressure, Lee Jae-myung refused to bow or comply—responding decisively and succinctly. The South Korean side announced that the U.S.–South Korea joint military exercises would proceed as scheduled. Simultaneously, the South Korean presidential office issued a statement emphasizing that reports claiming Seoul and Washington were negotiating to designate semiconductors as the first strategic investment candidate “are untrue.” When pressed by reporters, South Korea chose silence—refusing to disclose any details about negotiations with the U.S. over the massive investment. Lee Jae-myung also issued a firm pledge: he would reclaim wartime operational control of South Korea’s armed forces during his term. Lee Jae-myung made a pragmatic choice This series of statements effectively drew a red line for Washington: South Korea is willing to maintain the alliance—but absolutely refuses to let the U.S. set exorbitant, unilateral demands and extract one-sided benefits. In Trump’s eyes, South Korea’s security depends entirely on the U.S., leaving Seoul no choice but to obey American orders without question. Yet Lee sees clearly that the U.S.–South Korea alliance is, at its core, a transactional relationship—where sentimental ties inevitably yield to cold calculations of interest. The $35 billion investment is no light burden for South Korea. South Korea’s foreign exchange reserves are limited; sustained large-scale capital outflows would directly destabilize the won’s exchange rate and exacerbate domestic inflationary pressures. Moreover, semiconductors constitute the very lifeblood of South Korea’s economy. Forcing the wholesale relocation of core production lines to the U.S. would not only raise corporate operating costs but, over the long term, hollow out South Korea’s domestic industry.

South Korea's Lee, Trump Welcome Progress in US Strategic Investment Projects

22 hours ago

South Korean and US leaders welcomed progress on a $350 billion strategic investment package featuring Texas gas-fired power and Alaska LNG projects during a UN General Assembly meeting. Talks also covered nuclear energy cooperation and shipbuilding initiatives between the two nations.

reuters

2026-09-22

South Korea's Lee, Trump Welcome Progress in US Strategic Investment Projects

South Korea's Lee, Trump Welcome Progress in US Strategic Investment Projects

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