On November 14, 2025, the Republic of Korea and the United States published a joint report on the summit between President Lee Jae-myung and President Donald Trump, held on October 29.
Usually, such documents are published immediately following negotiations, as they are prepared in advance, but in this case, it took the parties two weeks to coordinate and clarify the specifics of the agreements. All the more reason to look at the text carefully!
Tariffs are reduced, but what does the US get in return?
The historic July announcement of a strategic trade and investment agreement with Korea that reflects the strength and longevity of the US-South Korea alliance is currently nothing more than a memorandum of understanding on Seoul’s investment commitment. In other words, it is a protocol of intent, not a ready-made, legally binding agreement, and is yet to be elaborated on.
The main aspect is that the tariffs previously announced by Trump on cars and car parts, wood, and lumber imported to the United States from South Korea have been reduced from 25% to 15%. For some pharmaceuticals, raw materials, and aviation components, tariffs were lifted altogether.
In exchange, South Korea will invest $350 billion in US industry. A $150 billion portion, which has already been approved, will go to the shipbuilding industry. This investment is intended to lay the foundation for the industry’s growth in both the United States and South Korea. This deal has already been approved. “The United States welcomed the Republic of Korea’s commitment to contribute to the modernization and capacity expansion of the American shipbuilding industry, including through investments in American shipyards and the American workforce.” This will allow for a rapid increase in the number of US commercial vessels and warships, including the potential construction of American vessels at South Korean shipyards, and the profits generated will go to Korean companies.
Another $200 billion will be allocated in accordance with the Memorandum of Understanding on Strategic Investments (MOU), which is expected to be signed in some time. Theoretically, the promised amount of capital will be invested only in projects where “commercial rationality” is guaranteed, but it is unclear how it will be guaranteed, as it is planned to select joint investment projects by January 2029, i.e., by the end of Trump’s presidential term.
To prevent the foreign exchange market from taking a hit from such a payment, South Korea will pay in real money, but not more than $20 billion per calendar year. The South Korean Finance Ministry noted that the sum specified in the MOU represents the maximum limit rather than a fixed annual commitment. However, conservative experts warn that capital outflows could increase the dollar deficit, exacerbate exchange rate volatility, and limit domestic investment during a period of structural economic fatigue.
In a critical situation, “the Republic of Korea may request an adjustment in the amount and timing of funding, and the United States will consider such a request in good faith” (they will consider it but will not necessarily comply).
In addition, “conditions for a new level of cooperation in areas such as shipbuilding, nuclear energy, artificial intelligence, and semiconductors will be created.”
As for mutual trade, South Korea will lift the 50,000-unit limit for vehicles meeting American safety standards, which can be imported into the Republic without further modifications. Furthermore, the country “will work with the United States to eliminate non-tariff barriers affecting trade in food and agricultural products.” This means that the opening of the Korean rice and beef market, which was feared in Seoul, is not yet envisaged. “The United States and the Republic of Korea commit to ensuring that American companies are not discriminated against or face unnecessary barriers in terms of laws and policies related to digital services.”
Finally, the United States and South Korea will cooperate in the field of intellectual property rights protection, jointly combat all forms of forced labor, and protect the environment.
Strategic autonomy or a costly bargain?
The United States emphasized its commitment to defending South Korea through the continued presence of US Forces in Korea (USFK) and reaffirmed its commitment to enhanced deterrence with the full range of its capabilities, including nuclear.
In addition, US authorities strongly support the transfer of the right of operational control of the army in wartime (OPCON) when South Korea confirms its readiness for this.
In exchange, Seoul has committed to increasing its military budget to 3.5% of GDP (previously 2.32%), providing $33 billion in comprehensive support to the USFK, and (as part of efforts “to strengthen its military capabilities necessary to conduct joint conventional defense against the DPRK”) spending $25 billion by 2030 for the purchase of US military equipment.
The fact that the United States has given permission to South Korea to build attack submarines with nuclear engines is particularly seen as a victory. The United States will work closely with the Republic of Korea to enhance the requirements for this shipbuilding project, including the search for fuel sources. In addition, the United States supports civilian uranium enrichment in South Korea and reprocessing of fuel for peaceful purposes.
Cementing the pro-US line in regional cooperation
Within the framework of this part of the agreement, the parties confirmed Seoul’s adherence to Washington’s policy, such as:
- The parties “reaffirmed their commitment to the complete denuclearization of the DPRK, peace, and stability on the Korean peninsula.” This is despite the fact that Pyongyang has declared this agenda unacceptable and has unequivocally refused to negotiate on this topic.
- Trilateral cooperation with Japan will be strengthened.
- The parties stressed the importance of maintaining peace and stability on both sides of the Taiwan Strait. They called for a peaceful resolution of issues related to the Taiwan Strait crossing and opposed unilateral changes to the status quo.
- Beijing is also included in efforts “to ensure freedom of navigation, flights, and other legitimate uses of the sea…the maritime claims of all countries must comply with international maritime law.” This definitely refers to China’s actions in the South China Sea.
Internal political discussion
The controversial document could not but cause internal political disputes as to whether President Lee had defended national interests. Moreover, the opposition demanded a transparent review of the US-South Korean agreements by the National Assembly, as paragraph 1 of Article 60 of the Constitution grants the National Assembly the authority to consent to international treaties that impose a significant financial burden on the nation or people.
From the Democrats’ point of view, everything proceeded as it should have. Tariffs have been reduced, the conditions for the supply of semiconductors are no worse than those of others, the agricultural market has not been opened, and, most importantly, the country will have nuclear submarines. And since, unlike the free trade agreement, the MOU itself states that it is not binding, it is not yet an official agreement, and nothing needs to be approved in parliament.
To summarize
As President Lee stated, “The South Korean-US trade, commerce, and security negotiations, which were among the biggest variables affecting our economy and security, are concluded.… Good competition requires excellent partners, and I believe President Trump’s rational decision played a significant role in achieving meaningful agreement.”
However, in Russia the talks are being viewed differently.
- Trump’s tariff-related attack could not be completely repelled. Meanwhile, Trump always makes excessive demands first and then agrees to bring down the price, retaining a winning position.
- South Korea is being militarized at a faster pace than under Yoon Suk Yeol. Why South Korea would need a nuclear submarine and against whom it is going to be used is a question of extreme interest for both Moscow and Beijing. In addition, although the agreement on financing the US military contingent in Korea has not been revised, Trump achieved additional funds, i.e., exactly what he promised during the election campaign regarding what he intends to receive from Korea.
- The US will not build the Koreans any ships for free; the price will be increased dependence, not strategic autonomy.
- Considering such developments, the DPRK will continue to refuse dialogue with the South, since demands of denuclearization are tantamount to regime change, and statements vis-à-vis China will also be taken into account. There does not seem to be any strategic progress in relations between Seoul and Beijing.
- The very fact that the document was not published immediately and it is not a ready-made agreement or declaration suggests that negotiations are not and will not be easy. Instead of not giving in and eventually achieving dialogue – like Kim Jong Un – President Lee took the path of flattery, which Trump takes for granted and continues to put pressure on Seoul to take another step back.
- Finally, Trump is not eternal. Where is the guarantee that his successor will not decide to “traditionally renegotiate the terms” and the investment will not turn into a de facto donation?
Konstantin Asmolov, PhD in History, leading research fellow at the Centre for Korean Studies of the Institute of China and Modern Asia at the Russian Academy of Sciences
Follow new articles on our Telegram channel
