October 30, 2025
SEOUL – The leaders of South Korea and the United States reached a top-level breakthrough after months of tariff negotiations, as they also discussed security issues at their second summit in about two months on Wednesday.
Kim Yong-beom, presidential chief of staff for policy, announced that Seoul and Washington had “reached an agreement with the US on the details of the tariff negotiations” during a press briefing following the summit.
The surprise announcement came hours after an 87-minute meeting between South Korean President Lee Jae Myung and US President Donald Trump, which took place on the margins of the APEC summit.
In essence, Kim explained that South Korea plans to make $200 billion in cash investments that will have an annual investment cap of $20 billion, depending on the progress of each project.
“This ensures that the investment remains within the capacity of our foreign exchange market and minimizes its impact on market stability,” he said.
As for the $150 billion shipbuilding cooperation initiative — known as “Make American Shipbuilding Great Again” or MASGA — it was agreed that the project will be led by Korean companies, with their own investments.
Kim also said the “reciprocal tariff” rate, which was reduced to 15 percent following the agreement reached on July 30, will hold at that level. Tariffs on automobiles and auto parts will also be reduced to 15 percent from 25 percent, matching those of the European Union and Japan.
Going into Wednesday’s negotiations, Seoul and Washington had differed mainly over the proportion of cash investment, the installment period for those payments, and the profit-sharing arrangements between the two sides from such investments.
Washington’s original demand was for South Korea to contribute the full $350 billion as an upfront payment, while Seoul sought to reduce the cash portion out of concern that it could destabilize the foreign exchange market.
Minutes before Seoul’s announcement, Trump hinted that a trade deal had been clinched. “We did,” he told reporters at the APEC leaders’ banquet hosted by Lee when asked if an agreement had been reached, without offering further details.
Speaking at the press briefing, Kim also said the Lee administration “has thoroughly defended against any additional market openings in the agricultural sector,” including highly sensitive items such as rice and beef.
Kim disclosed that Seoul and Washington will release the outcome of the agreement in the trade and security sectors in the form of a “fact sheet” within a few days.
“In the area of trade, the memorandum of understanding contains far more detailed provisions, and most of the work has already been completed,” Kim said, adding, “The draft text of the memorandum has been nearly finalized.”
The second meeting carried added significance as attention centered on whether the summit would produce a formal, written outcome — something the allies failed to achieve during the first Trump-Lee summit in Washington on Aug. 25.
At the same briefing, South Korean director of national security Wi Sung-lac said the two leaders agreed on the need for South Korea to develop nuclear-powered submarines.
“President Trump expressed agreement that South Korea needs to develop nuclear-powered submarine capabilities and suggested that the two sides continue follow-up consultations,” Wi said of the summit outcome.
Wi said Trump “acknowledged the changing circumstances, such as North Korea’s construction of nuclear-powered submarines.”
During the luncheon summit, Lee pledged to increase the country’s defense budget while calling on the US to grant permission for Seoul to obtain fuel for nuclear-powered submarines as part of Washington’s initiative to “modernize” the alliance.
“To help ease the US defense burden, I would like to emphasize that South Korea will firmly move forward with increasing its defense budget and supporting its defense industry,” Lee told Trump in his opening remarks during the luncheon summit.
As part of South Korea’s initiative to bolster its defense capabilities, Lee called on Trump to “make a determination to permit South Korea to obtain fuel for nuclear-powered submarines.”
Lee explained that South Korea’s current “diesel submarines have limited submerged endurance, which constrains their ability to track North Korean and Chinese submarines.”
“If fuel supply were permitted, we could, using our own technology, construct multiple conventionally armed submarines and carry out maritime defense operations in the East and West Seas around the peninsula — a step that would substantially reduce the operational burden on US forces,” Lee told Trump.
During the meeting, Lee also asked Trump to jump-start negotiations to revise the current civil nuclear cooperation agreement between Seoul and Washington.
“I would ask that you instruct officials to advance substantive consultations so these matters can be resolved more quickly,” Lee said.
Wi further explained that acquiring fuel for nuclear-powered submarines is tied to revising the nuclear agreement, given that the current one does not apply to military use.
Seoul is only permitted to enrich uranium to a level below 20 percent with US approval, while independent reprocessing of spent fuel remains prohibited under the agreement.
Since nuclear-powered submarines require highly enriched uranium, moving forward with the plan to develop such submarines would require US consent, either through exemptions or alternative arrangements.
During the summit, Lee and Trump also touched on North Korean leader Kim Jong-un’s continued silence in response to Trump’s repeated overtures to meet during his visit to South Korea.
“Chairman Kim Jong-un was unable to fully accept and understand President Trump’s genuine intentions, so the talks fell through,” Lee told Trump. “However, I believe that this too will become another seed — a starting point that will create a great wave of peace on the Korean Peninsula.”
Lee reaffirmed his pledge to “faithfully play the role of a peacemaker who creates the conditions” for Trump to achieve peace on the Korean Peninsula, echoing his remarks during their first summit.
In response, Trump said he remains committed to making efforts to resolve the North Korean issue, explaining that he and Kim “really weren’t able to work out the timing.”
“I will say this, that the Korean Peninsula, and I know you are officially at war, but we will see what we can do to get that all straightened out,” he said.
“But we’ll have other visits, and we’ll work very hard with Kim Jong-un and with everybody on getting things straightened out, because that makes sense.”
“I have a couple of phrases that I like. One of them is ‘common sense.’ It’s common sense that that should work out, and I feel certain that it will. It may take a little time — you have to have a little patience — but I feel absolutely certain that it will.”
Hours before Trump arrived in South Korea, North Korean state media reported that the country had test-fired sea-to-surface strategic cruise missiles Tuesday, reaffirming the country’s plan to “put nuclear forces into practice.”
