South Korean President Lee Jae-myung and US President Donald Trump held a summit in Gyeongju on Wednesday (October 29). The two sides reached substantial consensus on key areas including trade, defense, nuclear submarine fuel, and technological cooperation, marking a new, more comprehensive and in-depth phase in the ROK-US strategic alliance.
Trump arrived in South Korea ahead of the APEC summit on Friday (October 31). This was the first meeting between the two leaders in 65 days since their initial meeting at the White House in August. Trump arrived at the summit venue, the National Gyeongju Museum, in his armored limousine, "The Beast," on Wednesday and greeted the crowd with his signature fist bump, officially beginning his state visit to Gyeongju.
At the welcoming plaza in front of the National Gyeongju Museum, South Korea held a high-level welcoming ceremony. Accompanied by a 21-gun salute and solemn military music, a band played songs frequently used by Trump at campaign rallies, creating a warm and friendly atmosphere.
Before the formal talks, Lee Jae-myung awarded Trump the Grand Order of Mugunghwa, South Korea's highest honor, in recognition of his "outstanding contributions to the development of the ROK-US alliance." This medal, crafted from 190 cheong of gold and 110 cheong of silver and inlaid with rubies and amethysts, cost 130 million won (approximately S$118,210) to produce. This was the first time South Korea had awarded this medal to a US president, symbolizing the solidification and upgrading of the alliance between the two countries. At the same time, Lee Jae-myung presented a model of the Silla Golden Crown, a symbol of leadership and legitimate authority, signifying the inheritance of the spirit of ancient civilization and the modern strategic partnership.
The ROK-US summit lasted 87 minutes and included a working lunch. Although neither side mentioned tariffs or investment in their public statements, and no press conference was held afterward, it initially sparked speculation about tariff negotiations. However, at 6:50 pm that evening, Trump said at the dinner, "Tariff negotiations have entered the final stage." Thirty minutes later, the South Korean presidential office announced that ROK and the US had reached a final agreement on tariffs and investment.
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According to the agreement, South Korea will contribute $200 billion in cash in phases from its $350 billion investment plan in the US, with the remaining $150 billion going to the joint South Korea-US shipbuilding cooperation fund, MASGA (Make America’s Shipbuilding Great Again). The funds will be disbursed in installments of no more than $20 billion per year to alleviate pressure on the foreign exchange market.
Kim Yong-beom, Chief of Staff for Policy at the South Korean Presidential Office, pointed out, “This phased mechanism adjusts the US’s original requirement of ‘$25 billion per year over eight years’ to ‘no more than $20 billion per year over ten years,’ satisfying both the US’s implementation goals and providing South Korea with stability.”
Kim Yong-beom said, “Until last night, the outlook remained unclear, but today we achieved a remarkable breakthrough.”
Former South Korean Minister for Trade Chung In-kyo commented, “Reaching a consensus on $20 billion in the middle of both sides’ positions is a result of pragmatic diplomacy.”
Analysts point out that this breakthrough reflects Trump’s political intention to achieve “visible results” during his Asia tour.
In return for the investment, the US agreed to reduce tariffs on South Korean automobiles and auto parts from 25% to 15%, aligning with the treatment given to Japan and the EU; semiconductor exports will receive the same level of preferential treatment as Taiwan, and pharmaceuticals will receive most-favored-nation (MFN) treatment.
The South Korean auto industry expects that Hyundai and Kia's tariff burden will decrease from 8.4 trillion won to 5.3 trillion won, a reduction of approximately 3.1 trillion won (about US$2.81887 billion).
Meanwhile, the "MASGA Fund," led by South Korean companies, includes not only investment but also guarantees and ship financing. Both sides agreed to a 50/50 profit split before principal and interest are recovered, with the structure adjustable after 20 years; after principal recovery, the US's share of profits will rise to 90% to ensure the project's commercial sustainability.
South Korea and the US deepen security and technology cooperation, ushering in a new era of alliance.
Besides trade and economic issues, defense and technology cooperation were also key focuses of the talks. Lee Jae-myung proposed US support for South Korea's nuclear submarine fuel development, emphasizing that "diesel submarines have limited underwater range and are difficult to counter the submarine threats from North Korea and China." Trump expressed understanding and agreed to initiate follow-up technical consultations. The two sides also signed several memorandums of understanding covering fields such as artificial intelligence, next-generation communications, biotechnology, quantum computing, and aerospace development, and decided to establish a joint research platform.
The South Korean Ministry of Science and ICT described the relationship as "a shift from a traditional security alliance to an innovative technology alliance." Analysts point out that this meeting not only solidified economic and defense cooperation but also ushered in a new era of alliance driven by innovation.
