Trump closes trade deal with South Korea: 'We had a tremendous meeting'

Donald Trump landed Wednesday in South Korea, where he held high-level talks with President Lee Jae Myung and is expected to meet his Chinese counterpart Xi Jinping on Thursday. This visit marks the final stop on his Asian tour, which also included stops in Malaysia and Japan.

"We had a tremendous meeting today with South Korea — with lots determined... We pretty much finalized a trade deal," said the president, who is in the South Korean city of Gyeongju for the Asia-Pacific Economic Cooperation (APEC) forum summit.

South Korea's presidential chief of staff for policy, Kim Yong Beom, confirmed the trade agreement with the United States following the bilateral meeting between President Lee Jae Myung and Donald Trump.

The agreement with South Korea

The July trade agreement with South Korea reduced reciprocal tariffs to 15%, but South Korean auto exports were still hit with a 25% tariff.

Trump agreed in July to reduce to 15% the tariffs he had imposed on South Korean products in exchange for Seoul's commitment to invest $350 billion in the United States.

Of the $350 billion investment Trump demanded upfront, South Korea assured Wednesday that $200 billion will be made in cash and $150 billion will be invested through shipbuilding cooperation, to be led by South Korean companies.

The $200 billion investment will be made over several years, with annual investment capped at $20 billion, Kim said.

The agreement with the U.S. will reduce tariffs on automobiles to 15%, the same rate as its competitor Japan, and the tariff rate on semiconductors will not be unfavorable compared to that of rival Taiwan.

Speech at APEC

On Wednesday, after arriving in South Korea, the Republican leader spoke at the Asia-Pacific Economic Cooperation summit, where he discussed his tariff policy and hinted that a trade deal with the country could be finalized “very soon.”

Trump also highlighted deals already signed with Malaysia, Cambodia and Japan, calling them “incredible victories” for regional economic stability.

"Not only are the tariffs strengthening our alliances, they're also bringing peace to the world. On Sunday in Malaysia, we signed the Kuala Lumpur Peace Accords — ending forever the war between Cambodia and Thailand," the president said.

Trump's highest decoration

On the sidelines of the forum, the South Korean leader presented the president with a replica of a historic crown, modeled after the ancient gold crown of the Kingdom of Silla, which is on display at the Gyeongju National Museum.

The gesture was part of a welcoming ceremony that also included the presentation of the Grand Order of Mugunghwa, South Korea’s highest honor, in recognition of Trump’s role in negotiations with North Korea during his first term.

More defense spending

President Lee Jae Myung announced Wednesday that he will increase his country's military spending to lessen the "burden" on the United States.

Lee said he wants to "modernize" South Korea's alliance with the United States. South Korea's current defense budget is about 1.4 times the total gross domestic product of North Korea, Lee said.

"So our budget, our military spending, is quite significant, and we are ranked number five in terms of our military spending," he added. "However, I know it's important to continue to decrease its burden, the military and defense burden for us, so we will continue to increase our military spending."

Submarine fuel

The South Korean president on Wednesday expressed his desire for the United States to authorize South Korea access to fuel for nuclear-powered submarines, with the aim of matching the capabilities of North Korean and Chinese submarines.

"We don't intend to build nuclear-powered submarines, but because diesel submarines have less submerged navigation capability, there are restrictions on tracking North Korean or Chinese submarines," Lee told Trump during the talks.

"So if you allow us fueling... if we build several submarines equipped with conventional weapons... the U.S. military's burden could be significantly reduced," he added.

Previous governments in South Korea expressed interest in developing nuclear-powered submarines but Washington has maintained its opposition for decades.

There will be no meeting with Kim Jong Un

President Donald Trump confirmed that he will not meet with North Korean leader Kim Jong Un during his trip to South Korea.

Trump made his comments to South Korean President Lee Jae Myung, adding that he remained committed to peace on the Korean Peninsula.

"I know Kim Jong Un very well. We get along very well. The truth is that we have not been able to finalize the timetable. President Xi is coming tomorrow, and it's something that's obviously very important for the world, for all of us," the president said during the bilateral meeting in Gyeongju.