U.S. agrees to a new trade deal with "South Korea" before 2027?

Prediction markets put the probability at 26%: U.S. agrees to a new trade deal with "South Korea" before 2027. Currently, markets see this as unlikely (26% YES). Tariffs: President Trump said he planned to raise U.S.

What’s Happening

The probability that the U.S. agrees to a new trade deal with "South Korea" before 2027 currently stands at 26%, reflecting significant headwinds from a broader protectionist push by the Trump administration. On May 1, 2026, President Trump announced plans to raise U.S. tariffs on European cars and trucks to 25%, accusing the European Union of failing to comply with a previously agreed trade deal. This aggressive posture has cast a shadow over negotiations with other major trading partners, including South Korea, as the administration signals a willingness to use tariff threats as leverage. The White House has not publicly outlined a timeline for renegotiating the existing U.S.-Korea Free Trade Agreement (KORUS FTA), but the current tariff escalation with the EU suggests that any new deal with Seoul would face a similarly tough negotiating environment. [NYT, May 01]

The stalled EU-U.S. trade talks underscore the challenges facing any effort to secure a new agreement with South Korea. On May 6, 2026, European Parliament and Council negotiators failed to finalize implementing legislation for the Turnberry trade deal, with the EU’s Chief Negotiator Bernd Langel acknowledging there is “still some way to go” on safeguard mechanisms. The 25% auto tariff deadline now looms, threatening to disrupt transatlantic commerce and potentially spill over into other trade relationships. For South Korea, which is a major auto exporter to the U.S., the administration’s focus on automotive tariffs is particularly relevant. The KORUS FTA, renegotiated in 2018, already includes provisions for U.S. auto exports, but the current trade climate suggests the White House may seek deeper concessions from Seoul, including stricter rules of origin or higher domestic content requirements. [Automotive World, May 07]

Legal and political obstacles further complicate the path to a new U.S.-South Korea trade deal. On May 7, 2026, the U.S. trade court ruled against President Trump’s 10% global tariffs, finding that across-the-board levies were not justified under a 1970s trade law. The ruling, which small businesses had sought, could limit the administration’s ability to unilaterally impose tariffs as a negotiating tactic. Meanwhile, Trump has issued a new deadline for the EU to implement trade deal terms before raising tariffs to “much higher levels,” signaling that the White House remains committed to a confrontational trade strategy. For South Korea, the combination of legal constraints and the administration’s aggressive stance means that any new deal would likely require congressional approval and face intense scrutiny from both domestic industries and trading partners. The 26% probability reflects these uncertainties, with market participants weighing the possibility of a deal against the current protectionist momentum. [The Guardian, May 07]

Traded on Polymarket — $56K Volume

Lower-volume market on Polymarket ($56K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 29c YES.