South Korea will pay the U.S. 1.04 trillion won ($924 million) as a contribution for maintaining 28,500 American troops in the region for a year, after a deal was signed in Seoul on Sunday.
For the renewal of the pact, Seoul had previously insisted that the costs to be borne by South Korea not exceed 1 trillion won and that the deal remain valid for three to five years.
Unlike past agreements, which lasted for five years, this one is expected to expire in a year, potentially forcing both sides back to the bargaining table within months.
"The US government realizes that Korea does a lot for the alliance and for peace and stability of this region", Betts said.
The president had been harping about South Korea not paying its fair share since the 2016 campaign, making this new agreement a clear victory for his policy of getting other nations to pay more for US force protection.
The South Korean ministry hasn't immediately revealed the exact amount of money Seoul would pay this year under the new deal.
A group of activists staged a rally Sunday in front of the foreign ministry building against the agreement, claiming that renegotiating the agreement would largely increase Seoul's burden.
South Korea began paying for the U.S. military deployment in the early 1990s, after rebuilding its war-devastated economy. The SMA will take effect after National Assembly ratifies it around April. "But I have no plans, I've never even discussed removing them". "But it's an important part and we are pleased that our consultations resulted in an agreement that I think will strengthen transparency and strengthen and deepen our cooperation in the alliance". Most U.S. troops were withdrawn in 1949 but they returned the next year to fight alongside South Korea in the Korean War.
South Korea resisted increased spending but was concerned President Trump might put US troop withdrawal on the table, or offer to scale back joint military exercises with the South even further, when he meets with North Korean dictator Kim Jong-un in Vietnam later this month - especially if the second Trump-Kim summit paves the way for a formal declaration of peace in the Korean War.
The disagreement had raised the prospect that Mr Trump could decide to withdraw at least some troops from South Korea, as he has done in other countries like Syria. 70 percent of South Korea's support covers the salaries of 8.700 South Koreans who provide administrative and technical services for the 28,500 American troops stationed in their country.
Trump announced last week that he will sit down with Kim for a second summit in Hanoi, Vietnam in late February.
"Maybe someday", he said in a CBS News interview.
"United States government realizes that Korea does a lot for our alliance and peace and stability in the region", said chief US negotiator Timothy Betts. The North and its main backer, China, also would like to see the USA military presence removed from their doorstep. The two sides had also difficulty on the final amount, as the Trump administration reportedly demanded an annual sum of around one billion dollars when the negotiations were close to an end late past year.