South Korea also agreed to invest $350 billion in the United States in projects selected by Trump and to purchase energy products worth $100 billion.

Trump suspended the loophole in February for China, Mexico and Canada, but he reinstated it to allow Commerce Secretary Howard Lutnick to establish protocol for collecting tariff revenue on low-value imports that would be eligible for the exemption.

The agreement comes after other American allies, like Japan, clinched their own deals, partly to moderate President Trump’s tariff threats.