Japan, South Korea Count Cost of Capitulation to Trump on Tariffs
Japan's PM Shigeru Ishiba with US President Donald Trump . South Korea President Lee Jae Myung !(Images X.com)
Trump’s South Korea Trade Deal Mirrors Japan Pact But Sparks Unease Over Agriculture and Tariff Terms
By TRH Global Affairs Desk
NEW DELHI, July 31, 2025 – US President Donald Trump announced a sweeping trade deal with South Korea on Truth Social, touting a “$450 billion” agreement involving American-controlled investments and large-scale energy purchases. The announcement came close on heels of a similar agreement with Japan, drawing comparisons over the economic burden and strategic concessions both countries made.
According to Trump, South Korea has committed $350 billion in US-controlled investments, along with $100 billion in purchases of liquefied natural gas (LNG) and energy products. In return, South Korea secured a 15% tariff rate on its exports — the same rate Japan received in its earlier deal, though Tokyo’s financial commitment reached $550 billion.
Reacting to the announcement, Haeyoon Kim, an Asia trade analyst, noted on LinkedIn, “Seoul appears to have matched Japan’s tariff rate, despite a lower investment figure. However, South Korea reportedly conceded more ground on sensitive areas like agriculture.”
She clarified that Seoul’s Blue House has stated that rice and beef markets will not face further liberalization — a politically sensitive point for domestic farmers.
Analyst Edo Naito commented that while South Korea may have preserved some red lines, “Japan’s deal was arguably worse.” He cited a surge in agricultural imports under zero tariffs, a 75% rise in rice quotas, and major purchases including 100 Boeing aircraft and large-scale defence and AI investments.
Japan has already invested over $860 billion in the US through 2024, with additional commitments reaching over $680 billion.
Naito also warned of the punitive clauses in Japan’s agreement. “The US will review Japan’s compliance every 90 days, with Trump reserving the right to snap tariffs back to 25% if unsatisfied,” he said. “It’s being called the ‘least worst deal’ by some analysts,” he added.
Meanwhile, experts caution that South Korea, unlike Japan, previously enjoyed zero tariffs under the KORUS FTA. The new deal potentially erodes that advantage, and more details are expected when South Korean President Lee Jae Myung visits Washington for a bilateral summit in two weeks.
Though Trump lauded the deal as a “great success” and a victory for American trade, critics argue that both Japan and South Korea are being cornered into massive economic commitments under a transactional framework that favours US strategic and electoral interests.
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