Beef and barriers: The Korea Herald

Asia News Network

2 days ago

July 29, 2025
SEOUL – As the Aug. 1 deadline for US reciprocal tariffs approaches, South Korea faces intensifying pressure to make politically sensitive trade concessions. Nowhere is this tension more visible than in the dispute over American beef.
On July 24, US President Donald Trump took to social media to praise Australia's decision to open its beef market — including imports of cattle over 30 months old — and warned that countries refusing 'magnificent' US beef were 'on notice.' Among major US trade partners, South Korea now stands alone in maintaining such restrictions.
What's at stake is more than beef. South Korea is racing to avert the imposition of 25 percent reciprocal tariffs on a range of exports. These duties would hit at a precarious moment for its manufacturing base, already strained by stagnant domestic demand and mounting global uncertainty.
In recent talks in Washington and New York, South Korean officials proposed a revised investment package totaling over $100 billion and offered limited concessions on rice and beef — areas long deemed untouchable. Yet US negotiators, emboldened by recent deals with Japan and the UK, are demanding more.
The comparison with Japan has become particularly thorny. Tokyo secured a reduction in reciprocal tariffs to 15 percent in exchange for a $550 billion investment commitment and broader market access for US agricultural and auto exports. South Korea's proposed investment, though substantial, remains well short of that mark.
More troubling, if South Korean exports are hit with 25 percent tariffs while Japan's face only 15 percent, Korean manufacturers would suffer an immediate and damaging competitiveness gap. Recent earnings reports from Hyundai and Kia already show steep profit declines, driven in part by early US tariffs on automobiles. Extending such disadvantages across additional sectors could deepen South Korea's growth malaise and leave long-term economic scars.
The options are narrowing, but not yet exhausted. Seoul has signaled a more flexible posture, suggesting it may allow partial openings of the beef market and step back from earlier prohibitions.
Unlike Japan's investment-heavy deal, however, South Korea is positioning its offer around industrial cooperation, particularly in shipbuilding — a sector President Trump has prioritized for revival. With China expanding its maritime footprint, Washington may be receptive to deeper strategic ties with Seoul in shipbuilding, semiconductors and batteries.
South Korea has framed these offers not merely as trade-offs, but as building blocks of a broader manufacturing alliance aligned with US supply chain objectives.
Still, the outlook remains uncertain. Trump and key trade officials are now in Europe for parallel negotiations, leaving only July 30 and 31 as viable windows for a final agreement. Absent a breakthrough, the tariffs will take effect on Aug. 1.
Analysts warn that if the US proceeds with a 25 percent tariff, South Korea's real gross domestic product could decline by as much as 0.4 percent, even under a gradual adjustment scenario. Medium-sized exporters would be hit hardest, lacking the scale to shift production or absorb the cost shock.
South Korea's negotiators must weigh the costs of limited market concessions against the broader fallout of failure. While agricultural sensitivities are real, clinging to legacy protections may imperil national economic interests. Other countries have accepted sectoral compromises in return for tariff relief and market stability. South Korea must now craft a tailored approach that secures similar benefits without replicating others' terms.
Avoiding a blanket concession is essential, as is avoiding blanket resistance. If Seoul cannot match Tokyo's dollar commitments, it must compensate with industrial leverage, strategic alignment and diplomatic finesse. These final days of negotiation will test its ability to safeguard the economic base while sustaining political and public consensus at home. Never has it been clearer that small concessions now could prevent far greater losses later.