Political unity needed for upcoming negotiations with US

Park Chong-hoon

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 groups to place complete confidence in his leadership, he stressed that a united political front is the only way to confront U.S. hardline tactics. We agree and believe this is not rhetorical posturing, but rather a strategic necessity.

The outcome for other countries’ trade negotiations with the U.S. have not been favorable when their leaders lack strong domestic political support. Politically unstable leaders have routinely been publicly pressured and embarrassed at bilateral meetings. Without a clear mandate, their positions crumbled under Trump’s aggressive negotiating style. Korea should guard against this, as political discord could translate into weakness at the negotiating table.

Korea’s limited maneuvering space in the tariff talks has not been due to its poor negotiation tactics. The "prisoner’s dilemma" situation has left Korea boxed in. Key partners like Japan and the European Union had already struck deals with the U.S., moving early to achieve bilateral agreements and avoid harsher penalties. Higher-level coordination between the three might have allowed them to resist unilateral demands more effectively. However, the urgency to secure individual outcomes fractured any chances at collective bargaining. By the time Korea entered negotiations, the framework was set and its choices were reduced to accepting terms or facing severe penalties.

However, at the upcoming summit, there is still a window for Korea to shape the outcome — if it learns from the last round of negotiations. We think this will require absolute domestic political unity. Continued criticism of Lee’s handling of the recent tariff deal by various political factions could weaken Korea’s hand. Washington will likely exploit any perceived internal divisions, which may signal that Lee has a fractured mandate and lacks the political capital to resist intense U.S. demands regarding Korea’s agriculture market and military burden-sharing.

Korea also needs to prepare for geopolitical backlash. Of its $350 billion investment pledge, its expanded involvement in U.S. military shipbuilding and defense supply chains could attract scrutiny from China. In the past, the 2016 Terminal High Altitude Area Defense anti-missile system deployment triggered a harsh Chinese response, including unofficial sanctions, trade restrictions and targeted economic retaliation. Korea must seek to avoid a repeat by engaging Beijing more proactively and mitigating risks before tensions escalate.

Balancing U.S. demands with Chinese sensitivities requires more than reactive diplomacy, but rather strategic foresight, economic diversification and disciplined messaging. Korea cannot afford to present its alliance commitments as zero-sum shifts against its largest trading partner, and needs to communicate its position as a national security necessity rather than geopolitical alignment.

Domestically, opposition parties have criticized Lee’s tariff deal because it ended with greater losses for Korea than did the deals struck by Japan and the EU, despite Korea having a free trade agreement with the U.S. While such criticism is factually correct, politicizing grievances over past concessions will only hinder future negotiations. Korea must focus on what it can control going forward: building leverage through scale, technological indispensability and national unity.

Legal arguments and appeals to fairness no longer sway outcomes in a trade landscape driven by power dynamics. The real defense for Korea is its economic weight, strategic positioning in global supply chains and, critically, its ability to present a stable and united front. If it enters negotiations politically divided, it could again find itself playing defense against U.S. demands rather than setting terms on equal ground.

The recent tariff deal was a forced compromise, shaped by structural dynamics that could not be avoided. However, the upcoming negotiations over agriculture, military spending and strategic alignment are still in play. Korea has the opportunity to shape these outcomes if it approaches the talks with a clear strategy, bipartisan unity and proactive diplomacy.

The Lee-Trump summit will be the actual test of Korea’s negotiating ability. If Lee enters negotiations amid a divided nation, there will be little margin for maneuvering. But if backed by a unified mandate, he will have a platform to defend Korea’s interests and resist one-sided demands.

Korea’s future will not be secured by relitigating past losses but by showcasing political unity, economic strength and diplomatic foresight. Unity is Korea’s only leverage in a negotiation landscape where power, not fairness, dictates outcomes.

Park Chong-hoon is director at the Standard Chartered Bank Korea.