Seoul's industry minister refutes questions on necessity for US tariff talks

Minister of Trade, Industry and Energy Kim Jung-kwan speaks during a dinner reception with reporters at a restaurant in Sejong, Tuesday. Courtesy of Ministry of Trade, Industry and Energy

SEJONG — Minister of Trade, Industry and Energy Kim Jung-kwan expressed caution over questions on the necessity of Korea's protracted tariff negotiations with the United States, amid mounting voices that paying the current 25 percent tariff will be less costly than hastily accepting Washington's demand to take most of the benefits that would be created from the $350 billion investment proposed by Seoul.

"Some say even if tariffs were raised from 15 percent (as the two countries previously agreed) to 25 percent, it would not be much compared to $350 billion, and I also sometimes think of this as an option," Kim said during a dinner reception with reporters, while also stressing that it was his personal opinion.

"But the real question is what kind of country we’re going to pass on to the next generation... When you look into the negotiations, you will realize it's about how we define our relations with the U.S., and it will be an important decision that will shape our future."

He added that the Donald Trump administration tends to label a country as not being on Washington's side if the country doesn't toe their line, describing it as "a different America from the one we knew 10 or 20 years ago."

Korea, he said, must deal with "a new America," adding that "even the smallest efforts will help make Korea a more peaceful nation without concerns over security or safety."

Minister of Trade, Industry and Energy Kim Jung-kwan arrives at Incheon International Airport, Sunday, after tariff negotiations with his United States counterparts in Washington. Yonhap

In late July, Seoul and Washington reached a broad deal to lower Washington's proposed 25 percent reciprocal and item-specific tariffs to 15 percent, in return for the promised 350 billion investment fund.

Since then, the two sides have been negotiating to fine-tune the details of the agreement, but they have been hitting a snag in recent weeks, as Washington demands 90 percent of the profits from the investment, unlike Seoul's stance to have the fund as a tool for Korean companies' improved presence in the U.S. market.

Fueling negative sentiment among the Korean public, the U.S. Immigration and Customs Enforcement raided the construction site of a joint Hyundai Motor–LG Energy Solution battery plant in Georgia, resulting in more than 300 Korean workers being detained.

Against this backdrop, there are growing calls for Korea to accept the 25 percent tariff and cushion the impact through government support for industries, with some arguing that the $350 billion Washington is demanding would be better spent on strengthening domestic companies.

The minister said the U.S. is also expressing its regrets, with Commerce Secretary Howard Lutnick calling for a "quick fix," and that the negotiations should be seen as a process of give-and-take rather than a deadlock, noting that the investment isn’t a one-sided loss for Korea.

“I’d like you to understand this as part of the ongoing process … (Negotiation) involves back-and-forth bargaining and that’s the stage we’re in right now,” Kim said.

“Some people ask whether the $350 billion is simply being taken entirely by the U.S. That’s not really the case … It can sometimes work in favor of businesses. So rather than seeing it as America pocketing the whole $350 billion, we should understand that the structure actually allows room for our companies to benefit as well."