Acting President Choi Sang-mok said Tuesday that South Korea and the US will soon enter into detailed negotiations on new US tariffs, as the country's economy is likely to be directly impacted by President Donald Trump's tariffs.
Choi noted that Trump threatened to exert all-out pressure on Korea in a recent speech to the US Congress, labeling the Korea-US trade relationship as "unfair" and calling for the revocation of federal subsidies promised to semiconductor companies.
“The arrow of Trump's America-first policies has begun taking aim at our country,” Choi said during a Cabinet meeting in Seoul, Tuesday.
“The government is in close communication with the US Department of Commerce, the Office of the US Trade Representative, and other relevant ministries, and will soon convene a Korea-US working-level consultation meeting to discuss tariff measures and engage in detailed discussions to strengthen cooperation in shipbuilding and energy,” he said.
Key topics for discussion are expected to include forthcoming 25 percent tariffs on steel and aluminum imports, set to take effect on Wednesday. This will be the first duty imposed under Trump’s second term on Korean products.
The US is Korea's third-largest export market for steel, following Japan and India. The tariffs are anticipated to take a toll on major Korean steel companies such as Posco and Hyundai Steel.
The negotiations are expected to address Trump's "reciprocal tariffs" referring to imposing a rate on each country that supposedly reflects the tariffs and nontariff measures that country imposes on the US ― scheduled to be announced on April 2.
“We will spare no efforts into finding a mutually beneficial agreement between Korea and the US,” Choi said.
Korea and the US agreed to establish a consultative group to explore a gas pipeline project in Alaska, energy, shipbuilding, tariffs and nontariff barriers. The decision was made when Industry Minister Ahn Duk-geun visited the US Feb. 26-28.
Trade Minister Cheong In-kyo is set to visit Washington this week to meet with US Trade Representative Jamieson Greer.
One of Cheong’s missions will be resolving the US administration’s misunderstanding over tariffs, specifically addressing Trump's claim that Korea's average tariff is four times higher than that of the US.
According to the Finance Ministry, most of the tariffs were eliminated following the Korea-US Free Trade Agreement in 2007. The average tariff rate on imported goods from the US is 0.79 percent as of 2024.
On the flip side, Choi said that Korean companies could seize business opportunities arising from the shift towards defense autonomy among European countries amid a growing split in the trans-Atlantic alliance between the US and Europe.
“Opportunities have arisen for the Korean defense industry. The government and defense companies must collaborate and respond swiftly,” he said.
On March 4, European Commission President Ursula von der Leyen proposed an 800 billion euro ($841 billion) plan to beef up defense for EU nations, aiming to lessen the impact of potential US disengagement in security guarantees for Europe.
“To effectively support our companies, the government will strengthen governmentwide oversight, expand export financing support and actively seek effective measures such as diversifying export industries,” Choi said.
hnpark@heraldcorp.com
