Korea’s global economic outreach at risk as top policymakers quits

Former Economy and Finance Minister Choi Sang-mok leaves the National Assembly, Thursday. Yonhap

Former Economy and Finance Minister Choi Sang-mok had been at the forefront of safeguarding Korea’s external credibility following former President Yoon Suk Yeol’s Dec. 3 martial law declaration and has played a key role in ongoing tariff negotiations with the U.S.

His abrupt resignation on Thursday amid threats of impeachment from the National Assembly has fueled growing concern among market watchers over Korea's future global economic outreach.

As of 12:00 a.m. Friday, the Ministry of Economy and Finance transitioned to an acting leadership system, with First Vice Minister Kim Beom-seok assuming the role of acting deputy prime minister and finance minister.

"It is unfortunate that Choi had to step down due to the impeachment motion," Kim said Friday during a meeting with Korea’s top four financial leaders. "We will activate a 24-hour emergency response system to minimize the impact of heightened political uncertainty on the financial and foreign exchange markets."

Choi’s departure comes at a particularly vulnerable time, as Korea faces growing pressure over U.S. tariffs.

He had been leading the ongoing trade negotiations aimed at easing U.S. reciprocal tariff measures. During two-plus-two talks with U.S. Treasury Secretary Scott Bessent, Choi secured broad agreement on key issues — including tariff and non-tariff barriers, economic security, investment cooperation and exchange rate policy.

Korea’s top four financial leaders pose before convening a regular meeting at the headquarters of the Korea Federation of Banks in Seoul, Friday. From left are Financial Supervisory Service Governor Lee Bok-hyun, Bank of Korea Governor Rhee Chang-yong, Acting Finance Minister Kim Beom-seok and Financial Services Commission Chairman Kim Byoung-hwan. Courtesy of Ministry of Finance

Now, the task of finalizing the so-called “July Package” framework ahead of the June 3 presidential election — while fending off increasing U.S. pressure for an early deal — falls solely to Trade Minister Ahn Duk-geun. Korea began working-level talks this week.

Even more concerning is the issue of currency policy, which had been reserved for direct discussions between Korea’s finance ministry and the U.S. Treasury. The leadership disruption could significantly weaken Korea’s negotiating leverage on the issue.

Choi's resignation, reflecting ongoing political instability, is also expected to pose a threat to Korea's international credibility.

Since December, Choi has held high-level meetings with finance ministers from major economies, global credit rating agencies and international organization leaders to reassure markets that political unrest was not translating into economic volatility.

Those efforts appeared to pay off when global credit rating agencies Fitch and S&P reaffirmed Korea's sovereign credit rating at the same level in February and April, respectively.

However, Choi’s abrupt resignation — and the uncertainty it brings — may now cast doubt on the durability of those reassurances.

"The consecutive resignations of the first and second acting presidential successors have raised concerns over a leadership vacuum ahead of the early June election, heightening political uncertainty and fueling fears of a weaker won," said Woori Bank economist Min Kyung-won.

Choi tendered his resignation at 10:28 p.m. Thursday, shortly after the National Assembly, led by the main opposition Democratic Party of Korea, submitted an impeachment motion against him.

Choi had been set to assume the role of acting president, following the resignation of former acting President and Prime Minister Han Duck-soo, who stepped down the same day to run in the presidential election. Han accepted Choi’s resignation just 15 minutes later.

"I sincerely apologize for stepping down at a time when domestic and global economic conditions remain extremely challenging," Choi said in a message to the press issued shortly after his departure.