Insights

Two major trade negotiations concluded almost simultaneously, redrawing the coordinates of global supply chains.

This report comprehensively analyzes the Korea-US trade deal concluded at the APEC Summit on October 29, 2025, and the US-China trade tensions easing reached the same month. KPMG Customs & Tax Service organizes the core of both negotiations and presents three strategies for tariff optimization.

Korea-US deal: auto tariff from 25% to 15%; USD 350 billion in US investment. The two countries agreed to lower the auto tariff from 25% to 15%. Reciprocal tariffs remain at 15%, but issuance of Korea-US FTA Certificates of Origin can apply existing tariff rates and leave room to lower the effective burden. Most-favored-nation (MFN) treatment is scheduled for select items such as pharmaceuticals and wood products. Korea committed to a total US investment package of USD 350 billion, including USD 200 billion in cash investment and USD 150 billion in shipbuilding cooperation. The package also includes 103 aircraft purchases and an LNG long-term contract (~3.3 million tons per year), highlighting physical cooperation.

US-China easing: partial lifting of rare-earth and semiconductor restrictions. The US cut tariff rates on fentanyl-related items from 20% to 10% and extended Section 301 retaliatory tariff exclusions by one year. China fully halted the US-targeted retaliatory tariffs and non-tariff measures it had announced since March 2025, withdrew rare-earth export controls, and partially lifted semiconductor restrictions — allowing trade at Nexperia's plants to resume. The one-year suspension of Section 301 fees on the maritime and shipbuilding sectors, however, remains a negotiating variable.

Three strategies for tariff savings: non-preferential origin management, USMCA utilization, and the auto-parts tariff regime. The report presents concrete methodologies for lowering the real tax burden after the negotiations. Meeting USMCA origin requirements can deliver up to 25% tariff relief, and per October 2025 guidance, a 15% additional reduction window has expanded for auto parts. Accurate HS code classification and systematic origin-information management remain parallel priorities.

What this means for M&A. The negotiated outcomes are likely to drive three M&A trends. First, expanded shipbuilding cooperation and long-term LNG contracts broaden strategic acquisition opportunities in the related value chains (shipbuilding equipment, offshore plants, LNG terminals). Second, partial reopening of rare-earth and semiconductor supply chains can re-ignite delayed cross-border deals in materials and components. Third, rising demand for production footprints in Mexico and Canada to meet USMCA origin requirements should activate bolt-on acquisitions of manufacturers in those regions.

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