Korea makes last-minute efforts as optimism grows over US tariff deal

Industry Minister Kim Jung-kwan, left, and presidential chief of staff for policy Kim Yong-beom arrive at Incheon International Airport, Thursday, to depart for Washington for follow-up tariff negotiations with the U.S. Yonhap

Seoul's top trade negotiators expressed optimism over the possibility of reaching a tariff agreement with the United States soon, even before the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting scheduled to begin later this month in Gyeongju, North Gyeongsang Province.

Amid signs of rapid progress after months of stalemate in the negotiations, they headed to Washington this week to finalize the talks, with both sides committed to accelerating efforts to break the deadlock.

Kim Yong-beom, the presidential chief of staff for policy, said Thursday the government is "hopeful" about wrapping up negotiations soon.

"Relevant U.S. departments, including the Department of the Treasury, the Department of Commerce and the Office of the U.S. Trade Representative (USTR), appear to be communicating much more closely with one another," he told reporters at Incheon International Airport.

Kim made the remarks before departing for Washington to attend follow-up negotiations on the July deal to lower Washington’s proposed blanket duties on Korean products from 25 percent to 15 percent, in exchange for Korea’s $350 billion investment in American industries.

Industry Minister Kim Jung-kwan, who accompanied the presidential aide to have his second meeting in two weeks with his U.S. counterpart, Commerce Secretary Howard Lutnick, said both sides have narrowed their differences over the $350 billion fund.

"While it is difficult to predict exactly when the deal will be reached, both sides agree that the upcoming APEC event in Korea is a good opportunity for our leaders to sign the agreement," the minister said.

Trade Minister Yeo Han-koo speaks to the press at Ronald Reagan Washington National Airport in Arlington, Va., Wednesday (local time). Yonhap

Trade Minister Yeo Han-koo, who departed earlier and arrived at Ronald Reagan Washington National Airport on Wednesday (local time) for his meeting with USTR Jamieson Greer, also reported "progress" in the tariff negotiations and highlighted the APEC summit as a “great opportunity.”

"We have been explaining to the U.S. the differences between Korea and Japan, as well as the burden that a significant direct cash investment would place on our foreign exchange market," Yeo said. "Now that the U.S. understands this, we are moving forward to explore a constructive solution."

U.S. President Donald Trump has asked Korea to follow Japan by providing the proposed $350 billion investment in cash and rejected Seoul’s proposal to structure the fund using loans and guarantees.

In response, the Korean government offered an unlimited currency swap arrangement with the U.S. to help ease the impact of the massive outflow of dollars on the foreign exchange market, citing differences with Japan regarding foreign exchange reserves.

Although reports surfaced that Washington may allow Korea to make the $350 billion investment in Korean won, trade negotiators declined to confirm the reports.

Several hours before their departure, however, U.S. Treasury Secretary Scott Bessent said he expects "something" to happen "in the next 10 days," signaling that both sides are close to resolving how to implement Seoul’s $350 billion investment pledge.

Deputy Prime Minister and Finance Minister Koo Yun-cheol, who also arrived in the U.S. on Wednesday to meet Bessent at the G20 finance ministers’ meeting and the International Monetary Fund’s annual gathering, said Korea-U.S. trade talks are now at a fast-paced coordination stage.

"The U.S. understands the situation of Korea’s foreign exchange market," Koo said. "Therefore, I believe the U.S. may accept what we have proposed."

According to sources familiar with the matter, Koo will visit the U.S. Office of Management and Budget on Thursday along with other Korean trade negotiators. They are expected to reach a final agreement on the details of the Korea-U.S. tariff agreement during the visit.

Although Trump reiterated Wednesday that Korea’s payment will be made “upfront,” his remarks have been interpreted as an effort to strengthen his bargaining power before a possible agreement at the APEC summit.

"We don’t need to worry too much about Trump’s latest remarks, since the government has been persuading his key aides," said Jang Sang-sik, head of trade trend analysis at the Korea International Trade Association. "Given the rising trade tensions with China, the U.S. has more reason to cooperate with Korea, which has supported its supply chain."

The industry minister also described Trump’s remarks as part of the ongoing negotiation process, though he noted it would be "inappropriate" to comment on statements from the leader of another country.

Reflecting the optimism, Hyundai Motor’s stock price climbed more than 8 percent after Thursday’s opening. Kia, the carmaker's affiliate, also saw a temporary 7 percent increase. Both companies have been cited as potential major victims of the U.S. tariffs, given the lighter duties imposed on their Japanese and European competitors.

Over the weekend, the heads of Samsung, SK, Hyundai Motor, LG and Hanwha will also visit Trump’s private Mar-a-Lago resort in Florida at the invitation of SoftBank Group Chairman Masayoshi Son to discuss cooperation on the $500 billion Stargate artificial intelligence infrastructure project.

The Korean business leaders are expected to meet the U.S. president at the event and support the government’s negotiating position by sharing their plans for investing in American industries.