US, South Korea Reach Major Trade Deal: Aircraft, LNG, and $350B Investment Package
President Donald Trump announced a sweeping trade agreement with South Korea on Wednesday, just hours after officials from both countries expressed skepticism about a breakthrough. The announcement came during Trump’s stop in Seoul as part of his three-nation Asia tour.
“We did, we did. We did reach a deal,” Trump said when asked by reporters before a dinner hosted by South Korean President Lee Jae Myung.
According to a White House fact sheet, the agreement includes a massive order by Korean Air for 103 Boeing aircraft, powered by engines from Cincinnati-based GE Aerospace. The purchase is valued at nearly $50 billion.
South Korea also committed to buying 3.3 million tons per year of American liquid natural gas and will invest $3 billion over the next five years to help upgrade U.S. power grid infrastructure. In total, Seoul will inject $350 billion into the U.S. economy, with $200 billion coming as direct cash payments in $20 billion annual installments.
The remaining $150 billion will be distributed in the form of loans designated for shipbuilding and port infrastructure. Profits from those investments will be split evenly between the two nations.
The deal marks a sharp turnaround from the tone just one day earlier, when Treasury Secretary Scott Bessent and South Korean officials downplayed the likelihood of a deal. “Prospects were not bright even last night, and there was dramatic progress on the day,” said Kim Yong-beom, a top policy adviser to President Lee.
The negotiations had been complicated by a July agreement in which Lee and Trump agreed to lower a proposed 25% tariff on most South Korean goods to 15%—excluding key materials like copper, steel, and aluminum. However, delays in finalizing the broader agreement meant Seoul had continued paying 25% tariffs on car exports to the U.S., an issue that had sparked tensions.
Lee had previously expressed concerns that South Korea couldn’t meet Trump’s full demands, pushing instead to structure much of the $350 billion package as loans rather than upfront cash.
The market reacted swiftly to news of the deal. South Korea’s currency jumped 0.54% against the U.S. dollar, while the Dow Jones Industrial Average surged nearly 300 points within the first 30 minutes of trading.
Trump’s visit to Seoul precedes a highly anticipated summit Thursday with Chinese President Xi Jinping, where further trade negotiations are expected.