Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Korea faces crucial week for tariff negotiations with US
U.S. President Donald Trump speaks during a meeting with Democratic Republic of the Congo Foreign Minister Therese Kayikwamba Wagner and Rwanda Foreign Minister Olivier Nduhungirehe in the Oval Office at the White House in Washington, D.C., Friday (local time). Reuters-Yonhap
By Nam Hyun-woo
Seoul advised to extend tariff reprieve, set framework at potential Lee-Trump summit
This week will be a crucial time for Korea’s negotiations with the United States over what the latter calls “reciprocal” tariffs, as Washington’s reprieve on the tariff imposition is set to expire on July 8.
While the Donald Trump administration is signaling that countries actively accommodating U.S. demands may be granted more time to negotiate, it will be difficult for Seoul to reach a trade agreement by the deadline, given that the Lee Jae Myung administration has been in office for less than a month. Experts say that the best possible scenario for the country is extending the reprieve period and using a potential Lee-Trump summit to establish a long-term trade framework.
During a press briefing on Friday (local time), Trump said that his administration will “send out a letter” over the next week and tell them “what they have to pay to do business in the United States,” noting, “We could extend it (the reprieve).”
U.S. Treasury Secretary Scott Bessent also told Fox Business that the Trump administration could wrap up its trade talks with countries by Sept. 1, adding that trading partners are approaching the administration with “very good” deals.
The series of comments is interpreted as a signal that Washington is increasingly considering pushing back the deadline of the current grace period, but only for countries that are actively accommodating U.S. demands.
Trump announced reciprocal tariffs on April 2 before pausing them on April 9 for 90 days to engage in negotiations. Since then, Korea has been making efforts to avoid a 25 percent tariff on its U.S.-bound exports, with its businesses announcing investment plans and government officials engaging in negotiations and outreach activities.
Minister of Trade Yeo Han-koo, right, speaks during a roundtable discussion with the U.S. Chamber of Commerce in Washington, D.C., Friday (local time). Courtesy of Ministry of Trade, Industry and Energy
However, government-to-government talks have been a challenge for Korea, as the country experienced a leadership vacuum for the 90-day period following the impeachment of former President Yoon Suk Yeol until the transition of power to President Lee on June 3.
Due to this, Korea’s Trade Minister Yeo Han-koo said Saturday, “We are ready to move forward with full-fledged negotiations with the United States from now on.”
Yeo is the first high-ranking official to visit Washington since the start of the Lee administration. From June 22, he spent a week engaging with U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.
“It is true that we are lagging behind other countries (in the tariff negotiations) due to our political environment,” a senior government official said.
“The U.S. may allow more time for negotiations with countries they believe to have negotiated in good faith, while those seen as uncooperative or difficult to talk with could face some sort of penalty.”
Through various channels, the U.S. has been making demands regarding what it calls the trade imbalances and nontariff barriers between the two countries. These include calling on Korean firms to participate in the Alaska liquefied natural gas project, lifting Korea’s ban on the import of beef aged over 30 months and exporting Korea’s high-precision map data.
President Lee Jae Myung checks time during a town hall meeting in Gwangju, Wednesday. Joint Press Corps
“So far, discussions have largely focused on defining the scope of negotiations, and the talks for the next several weeks will center on what the two countries will give and take,” said Jang Sang-sik, head of trade trend analysis at the Korea International Trade Association.
“From Korea’s perspective, it is important to stress that the trade talks are not solely about economic matters, but also about the strategic importance of the Korea-U.S. alliance. Seoul may have to consider taking a more accommodating stance on issues such as nontariff barriers.”
Jang said that Korea may have to take a strategy of extending the current tariff reprieve and elevating the negotiations to a summit-level dialogue in order to establish a better long-term trade framework with the U.S.
“Some of Washington’s demands involve risks that require presidential-level decisions,” he said. “The Alaska project, for example, comes with risks and massive upfront costs. The best-case scenario for now would be arranging a Lee-Trump summit in the near future and securing the reprieve until then, so these issues can be addressed comprehensively.”