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Korea Herald
5 days ago
- Business
- Korea Herald
Seoul official stresses commitment to accelerating tariff talks with US over next 2 weeks
A South Korean diplomat on Monday reiterated Seoul's commitment to accelerating trade talks with US President Donald Trump's administration over the next two weeks, hoping for a deal that expands two-way trade rather than constraining it. Ahn Se-ryeong, economic minister at the South Korean Embassy in Washington, made the remarks as Seoul seeks to reach a deal over various trade and industrial cooperation issues, including the Trump administration's "reciprocal" tariffs that are set to kick in Aug. 1. "We intend to accelerate substantive discussions over the next two weeks -- with the deadline extended (to) August 1 -- to identify a viable landing zone between (Korea) and the United States with the aim of reaching a mutually beneficial agreement that balances and expands our bilateral trade rather than constraining it," she said during a forum hosted by the Korea Economic Institute of America. The minister pointed out that while Seoul "fully understands" Trump's determination to rebalance the bilateral trade relationship, Korea believes that addressing non-tariff barriers and fostering cooperation in the manufacturing sector must go "hand in hand." "This approach will be essential to reduce trade deficit, not only in the short term but also in a more systematic and sustainable manner over the long time," she said. Touching on a recent visit to Washington by South Korea's Trade Minister Yeo Han-koo, Ahn said he had presented to the US side a vision for a "manufacturing renaissance partnership" -- as part of an effort by Seoul to strike a deal with the US. "The US has shown strong interest in Korea-US cooperation in strategic sectors, such as shipbuilding and semiconductors," she said, casting that approach to bilateral cooperation as "ships and chips." The minister, moreover, underlined Seoul's hope to secure exemptions or reliefs from sector-specific tariffs that the Trump administration has rolled out under Section 232 of the Trade Expansion Act of 1962 -- a statute that allows the president to adjust imports into the US when he determines they threaten to impair national security. "(We believe) Section 232 sectoral tariffs are as important as reciprocal tariffs for Korea as over half of our exports to the US could be affected by the current and potential future sectoral tariffs," she said. The Trump administration has imposed sectoral tariffs on steel, aluminum, autos and certain parts while considering the rollout of new tariffs on pharmaceuticals and semiconductors. Reciprocal tariffs, including 25 percent duties on South Korea, are slated to go into effect Aug. 1 unless the two sides reach a deal before then. The tariffs were initially supposed to take effect Wednesday last week following a 90-day pause, but Trump extended the deadline to Aug. 1, allowing countries more time to negotiate a deal. (Yonhap)
Korea Herald
26-06-2025
- Business
- Korea Herald
No compelling rationale found for Trump's 'reciprocal' tariffs on S. Korea: think tank report
The overwhelming majority of US exports to South Korea are already tariff-free under a bilateral free trade agreement, a think tank report showed Wednesday, stressing that no "compelling" rationale has been found for the Trump administration's "reciprocal" tariffs on the Asian country. The Korea Economic Institute of America released the report, titled "Fairness and Reciprocity? Reconsidering Trump's Liberation Day Tariffs on South Korea," which looked into whether the United States' claims about unfair South Korean trade practices are accurate. President Donald Trump announced reciprocal tariffs on April 2 -- a day that he called "Liberation Day." Meant to match what other countries impose on US exports, the tariffs, including 25 percent duties on South Korea, took effect on April 9, but Trump paused them for 90 days on the same day to allow for negotiations. "In short, this report finds no compelling economic rationale for the Liberation Day tariff rate on South Korea," the report said. "This suggests that the tariffs are better understood as political tools rather than trade policy rooted in sound analysis." Citing data from the Korea Customs Service and US Department of Agriculture, the report estimated that South Korea's effective weighted average tariff on US imports last year ranged between 0.19 and 2.87 percent -- a finding that challenges the much higher figures that the Office of the US Trade Representative and Department of Commerce cite. Measured in trade value, 95 percent of US exports to South Korea are tariff-free under the bilateral FTA, with most remaining tariffs affecting a narrow range of agricultural products subject to quotas, the report said. Of the remaining 5 percent, tariffs will be eliminated from another 4 percent of US exports to South Korea by 2026, it said. Touching on non-tariff issues, the report took note of the fact that there are bilateral and multilateral mechanisms to address the issues "more satisfactorily" in an apparent show of concern over the US' unilateral move to address trade deficits. "Ultimately, this report concludes that there is little need to change the US-South Korea trade relationship," it said. "It recommends resolving outstanding concerns—especially those related to non-tariff measures—through established bilateral mechanisms under the bilateral FTA rather than unilateral action." South Korea and the US have been in consultations to reach a wide-ranging deal over US tariffs, South Korea's non-tariff barriers and economic and industrial cooperation, before July 8, when the suspension of reciprocal tariff ends. Seoul has been seeking to avoid or minimize the impact of new US tariffs, including sectoral tariffs on steel and automobiles. (Yonhap)
Korea Herald
14-05-2025
- Business
- Korea Herald
Expert notes need for S. Korea to persuade China not to create conflict in Taiwan Strait
A security expert in the United States underscored the need Tuesday for Seoul to make diplomatic efforts to persuade China not to cause conflict in the Taiwan Strait, noting that it would be increasingly difficult for South Korea to avoid getting involved in a potential Taiwan contingency. Ellen Kim, director of academic programs at the Washington-based Korea Economic Institute of America, made the remarks, calling attention to the potential role of the 28,500-strong US Forces Koreain a contingency, which could draw South Korea into a potential Taiwan-related conflict. "My personal view is that increasingly, it's going to be very difficult for South Korea to be trying to avoid contingency," she said during a press meeting. "South Korea should try to make diplomatic efforts to avoid the war happening, and try to make a diplomatic persuasion toward China not to create conflict in the Taiwan Strait, which is sending a clear signal that having conflict is bad for China," she added. She predicted that although Seoul does not want to get entangled in the Taiwan issue, it could be drawn into a contingency should USFK forces be mobilized in the event of a crisis. "South Korea does have USFK troops, and that really becomes a major factor for China because if USFK forces come in support of Taiwan, that becomes a threat to China," she said. "If China considers that US forces are going to be attacking China, then South Korea will automatically join the conflict," she added. Kim highlighted the need for South Korea to think through how to respond to Taiwan Strait issues as they are no longer "local" ones. South Korea has been reluctant to openly discuss any role in the event of Taiwan Strait contingencies as it seeks to avoid tension with China, a key trading partner for Asia's fourth largest economy. But in recent years, it has taken on a clearer position, as it stated support for peace and stability in the Taiwan Strait in public documents. Meanwhile, Scott Snyder, the president and CEO at the KEI, cast ongoing trade talks between Seoul and Washington as an effort to "reconfigure" the bilateral trade relationship, while anticipating that the allies will also discuss how to "reconfigure" the defense and security relationship. He stressed that the reconfiguration process will not necessarily be in the form of "unilateral demands or requests" from the US side. "Because both sides bring something to the table in the defense security relationship and there are a lot of different ways to approach a reconfiguration of that approach," Snyder said. Snyder also pointed out a policy shift under the second Trump administration. "Basically, we've moved from offering carrots in the form of subsidies to threatening sticks in the form of tariffs," he said, drawing comparison with a policy approach of the former Biden administration. "I think that's what the South Korean companies are having to grapple with." South Korea and the US have been in talks over tariff- and non-tariff measures, investment cooperation, economic security and currency policy, as Seoul has been striving to avoid or minimize the impact of new levies rolled out by US President Donald Trump's administration. On the same day, the KEI released a survey that found more than half of Americans think South Korean firms' investments in the US are good for the US economy -- an indication of their relatively positive view on economic ties with the Asian country. Responding to a question over whether South Korean businesses' investments are good for the US economy, 55.62 percent of the respondents said, "Yes." The percentages for Japanese and German companies came to 64.33 percent and 62.64 percent, respectively, while the figure for Chinese companies stood at 38.99 percent. Regarding a question about whether South Korean firms' investments in new US high-tech manufacturing plants are good for the US economy, 57.23 percent said, "Yes." For this question, the percentages for Japanese and German companies were tallied at 68.8 percent and 66.43 percent, while the figure for Chinese companies was 46.38 percent. The survey was conducted on a sample of 1,500 people across 10 states, including Arizona, Florida, Georgia, Michigan and New York, from Dec. 17 through Jan. 2. It had an overall margin of error of plus or minus 8.21 percentage points. (Yonhap)
Yahoo
24-04-2025
- Business
- Yahoo
South Korea to target lower tariffs in opening round of US trade talks
By Jihoon Lee SEOUL (Reuters) -A South Korean delegation will meet U.S. counterparts on Thursday for an opening round of trade talks, with cooperation on shipbuilding and energy expected to be on the agenda, and possibly shared defence costs, as Seoul seeks lower tariffs. South Korea, which faces 25% U.S. reciprocal tariffs, is among the first countries the Trump administration has initiated trade talks with, after its first face-to-face discussions last week with Japan, another key Asian ally slapped with 24% tariffs. "I think this is only going to be the opening salvo of negotiations," said Tom Ramage, Washington-based economic policy analyst at the Korea Economic Institute of America (KEI). Given how Seoul is competing with other countries and faces a 90-day timeframe before a tariff pause is due to end, he said talks were likely to be extended, and may even result in some form of renegotiated U.S.-Korea Free Trade Agreement. South Korea, a key U.S. ally, has often been singled out by Trump for its trade surpluses with the United States, which hit a record high of $55.6 billion in 2024, up 25% from 2023 and nearly five times higher than in 2019. Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun are due to meet with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Washington, D.C. at 8 a.m. (1200 GMT), on the sidelines of an International Monetary Fund and World Bank Group gathering. The meeting was arranged at the request of the United States, Seoul said, and comes after U.S. President Donald Trump and South Korea's Acting President Han Duck-soo discussed shipbuilding, energy purchases, an Alaskan gas project and defence payments in a phone call on April 8. "The government will do its best to find a 'win-win' between the two countries, with focus on three areas of trade balance, shipbuilding and LNG, under the principle that the national interest is the foremost priority," Han said on Thursday. Since the call, South Korean officials have touted shipbuilding as a "very important card" it holds. South Korea is the world's second-largest shipbuilder after China, and Trump has specifically called for cooperation in the sector since returning to power. At the same time, Seoul has taken a more cautious stance on the Alaskan gas project, saying participation could be part of a negotiation package, while noting questions about its profitability. South Korea's auto sector is seen as particularly vulnerable to tariffs, as the country's car sales to the United States account for 49% of its total auto exports. The U.S. has already applied 25% tariffs on autos, prompting Seoul to announce emergency support measures to help major exporting companies such as Hyundai Motor and Kia. On the issue of payments for the 28,500 U.S. troops South Korea hosts, Ahn said on Wednesday Seoul was prepared if the issue was brought up, but Foreign Minister Cho Tae-yul told lawmakers later it would not be considered for a package deal and should be dealt with separately. In preparation for discussions on non-tariff barriers, Seoul's delegation will include officials from eight different ministries: finance, trade, foreign affairs, technology, transport, environment, agriculture and health. South Korea is among three Asia-Pacific countries that have a comprehensive trade pact with the United States, eliminating nearly all tariffs between the two countries. It was first signed in 2007 but revised in 2018 during Trump's first term after he said the initial agreement was a "horrible deal". ACTING LEADERSHIP The trade talks come as South Korea remains embroiled in its worst political crisis in decades. A snap presidential election will be held on June 3, after former President Yoon Suk Yeol was impeached and removed from office this month over his failed declaration of martial law. "We basically expect concrete progress on the negotiations between the Korean and the U.S. government to come out only after the snap presidential election," said Oh Suk-tae, an economist at Societe Generale. Oh said it would be especially difficult for South Korea to make any firm commitment on energy projects and defence costs under an acting president. Han has, however, in interviews this month expressed willingness to reach a deal, saying the country will not fight back against Washington as it owes the U.S. for its recovery from the 1950-1953 Korean War. He has also not ruled himself out of contesting the election. "Should acting president Han Duck-soo appear to successfully negotiate tariff waivers for South Korea, particularly for its auto exports, he would increasingly position himself as a presidential candidate," said economists at S&P Global Market Intelligence. See separate FACTBOX on the trade talks.
Reuters
24-04-2025
- Business
- Reuters
South Korea to target lower tariffs in opening round of US trade talks
SEOUL, April 24 (Reuters) - A South Korean delegation will meet U.S. counterparts on Thursday for an opening round of trade talks, with cooperation on shipbuilding and energy expected to be on the agenda, and possibly shared defence costs, as Seoul seeks lower tariffs. South Korea, which faces 25% U.S. reciprocal tariffs, is among the first countries the Trump administration has initiated trade talks with, after its first face-to-face discussions last week with Japan, another key Asian ally slapped with 24% tariffs. "I think this is only going to be the opening salvo of negotiations," said Tom Ramage, Washington-based economic policy analyst at the Korea Economic Institute of America (KEI). Given how Seoul is competing with other countries and faces a 90-day timeframe before a tariff pause is due to end, he said talks were likely to be extended, and may even result in some form of renegotiated U.S.-Korea Free Trade Agreement. South Korea, a key U.S. ally, has often been singled out by Trump for its trade surpluses with the United States, which hit a record high of $55.6 billion in 2024, up 25% from 2023 and nearly five times higher than in 2019. Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun are due to meet with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Washington, D.C. at 8 a.m. (1200 GMT), on the sidelines of an International Monetary Fund and World Bank Group gathering. The meeting was arranged at the request of the United States, Seoul said, and comes after U.S. President Donald Trump and South Korea's Acting President Han Duck-soo discussed shipbuilding, energy purchases, an Alaskan gas project and defence payments in a phone call on April 8. "The government will do its best to find a 'win-win' between the two countries, with focus on three areas of trade balance, shipbuilding and LNG, under the principle that the national interest is the foremost priority," Han said on Thursday. Since the call, South Korean officials have touted shipbuilding as a "very important card" it holds. South Korea is the world's second-largest shipbuilder after China, and Trump has specifically called for cooperation in the sector since returning to power. At the same time, Seoul has taken a more cautious stance on the Alaskan gas project, saying participation could be part of a negotiation package, while noting questions about its profitability. South Korea's auto sector is seen as particularly vulnerable to tariffs, as the country's car sales to the United States account for 49% of its total auto exports. The U.S. has already applied 25% tariffs on autos, prompting Seoul to announce emergency support measures to help major exporting companies such as Hyundai Motor and Kia. On the issue of payments for the 28,500 U.S. troops South Korea hosts, Ahn said on Wednesday Seoul was prepared if the issue was brought up, but Foreign Minister Cho Tae-yul told lawmakers later it would not be considered for a package deal and should be dealt with separately. In preparation for discussions on non-tariff barriers, Seoul's delegation will include officials from eight different ministries: finance, trade, foreign affairs, technology, transport, environment, agriculture and health. South Korea is among three Asia-Pacific countries that have a comprehensive trade pact with the United States, eliminating nearly all tariffs between the two countries. It was first signed in 2007 but revised in 2018 during Trump's first term after he said the initial agreement was a "horrible deal". ACTING LEADERSHIP The trade talks come as South Korea remains embroiled in its worst political crisis in decades. A snap presidential election will be held on June 3, after former President Yoon Suk Yeol was impeached and removed from office this month over his failed declaration of martial law. "We basically expect concrete progress on the negotiations between the Korean and the U.S. government to come out only after the snap presidential election," said Oh Suk-tae, an economist at Societe Generale. Oh said it would be especially difficult for South Korea to make any firm commitment on energy projects and defence costs under an acting president. Han has, however, in interviews this month expressed willingness to reach a deal, saying the country will not fight back against Washington as it owes the U.S. for its recovery from the 1950-1953 Korean War. He has also not ruled himself out of contesting the election. "Should acting president Han Duck-soo appear to successfully negotiate tariff waivers for South Korea, particularly for its auto exports, he would increasingly position himself as a presidential candidate," said economists at S&P Global Market Intelligence. See separate FACTBOX on the trade talks.
