The Korea Times

The $350 bil. question: Korea must negotiate like a strategic power, not a reactive one

The Korean won appears to be pricing in risks that belie the current, strong domestic economic data. Despite improving growth, booming semiconductor orders and benign inflation, the Korean won is underperforming emerging market peers — depreciating 2.74 percent against the U.S. dollar since September, compared to declines of 1.36 percent for the Thai baht, 0.82 percent for the Indian rupee and 0.09 percent for the Malaysian ringgit over the same period. We believe the market is pricing in uncertainty arising from Korea’s tariff deal with the U.S., which involves investing $350 billion in the U.S. as part of a tariff adjustment framework to avoid the impact of punitively high, immediate U.S. tariffs. The government has yet to officially explain the implications of this investment amount and how it will be structured, creating turmoil among markets and the public. The domestic debate has broken into two predictable camps, both partisan and not well considered, in our view. One side says Korea should reject U.S. demands outright, citing national interests and pride, while the other a

Oct 20, 2025By Park Chong-hoon

The $350 bil. question: Korea must negotiate like a strategic power, not a reactive one

Opinion

Political unity needed for upcoming negotiations with US

On July 30, Korea agreed to tariff terms with the United States, capping levies on Korean autos and auto parts at 15 percent. In exchange, Korea pledged $350 billion in investments in the U.S. and agreed to increase imports of U.S. liquefied natural gas (LNG). The agreement defused immediate trade risks for Korea, but as neither country has signed the deal yet, Korea may still face negotiation challenges. Sooner or later, President Lee Jae Myung will meet U.S. President Donald Trump at a summit to define Korea’s economic and security trajectory. The U.S. is pressing for Korea to further open up its agricultural market to U.S. rice and beef and asking for a significant increase in its financial contribution to U.S. military operations. As these demands target politically sensitive issues, Korea needs to prepare comprehensively and enter these talks with unified domestic political backing. Lee has requested that the trading teams negotiate for domestic national interests, emphasising that Korea should not concede to unreasonable demands. While he did not call on public and political gr

Aug 6, 2025By Park Chong-hoon

Political unity needed for upcoming negotiations with US

Opinion

Will Korea stand firm against Trump’s economic coercion?

The proposed tariffs by the U.S. on its trade partners appear to be not only protectionist, but also an instrument of economic coercion. The tariff plan for Korea — 25 percent across the board, 25 percent on autos, 50 percent on steel and a crushing 200 percent on pharmaceuticals — seems designed to force Korean companies to abandon their home base and relocate to the U.S. While Korea is not the U.S.’ only tariff target, it is uniquely vulnerable to such pressures. A key reason for this vulnerability is Korea’s heavy economic trade dependence on the U.S. — it ran a $55.6 billion trade surplus with the U.S. in 2024, the eighth-largest globally. We think the Donald Trump administration incorrectly views this surplus as evidence of unfairness that requires compensation, rather than as a natural result of Korea’s competitive advantages. This narrative ignores a crucial fact: that since 2017, Korea has reinvested a majority of its surplus with the U.S. directly back into the U.S. economy. According to Korea International Trade Association and the Export-Import Bank of Korea dat

Jul 15, 2025By Park Chong-hoon

Will Korea stand firm against Trump’s economic coercion?

Opinion

US trade policy impact on South Korea: Navigating challenges amid global realignment

U.S. President Donald Trump has ushered in a new era of economic nationalism, characterized by aggressive tariffs and protectionist measures. As of March 4, he has implemented a total 20 percent tariff on all imports from China, and we expect more stringent trade policies to be announced going forward. This shift in U.S. policy raises concerns for Korea — a U.S. ally — which is militarily dependent on the U.S. and has a substantial trade surplus with the U.S., exceeding $55 billion as of 2024. However, Korea's strategic importance, economic adaptability and the evolving global landscape should help it work through these challenges and reinforce its partnership with the U.S. Korea has demonstrated resilience amid shifting U.S. trade policies. U.S. sanctions on China under Biden’s administration had led to global supply chain adjustments. Contrary to concerns, Korea's exports to the U.S. surged by 14.9 percent annually from 2020 to 2024, outpacing China’s 4.8 percent export growth. In 2024, Korean exports reached a record $683.8 billion, up 8.2 percent from 2023. The semiconduct

Mar 27, 2025By Park Chong-hoon

Park Chong-hoon

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The $350 bil. question: Korea must negotiate like a strategic power, not a reactive one

Political unity needed for upcoming negotiations with US

Will Korea stand firm against Trump’s economic coercion?

US trade policy impact on South Korea: Navigating challenges amid global realignment

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