Trump's tariff pause is Korea's last chance to negotiate: Experts

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Trump's tariff pause is Korea's last chance to negotiate: Experts

Published: 10 Apr. 2025, 17:30

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

U.S. President Donald Trump is reflected in the bullet proof glass as he finishes speaking at a campaign rally in Lititz, Pennsylvania, on Nov. 3, 2024. [AP/YONHAP]

Korea got a breather with U.S. President Donald Trump’s 90-day grace period on reciprocal tariffs, giving it a second — and perhaps last — chance to cut the rate to the bone.

The Korean government on Thursday vowed to exert full efforts to move the needle for the next three months, taking the pause as a positive sign for the export-heavy economy.

Experts say Korea must not relax, but instead use the grace period to engage in negotiations, which could also be a golden opportunity to address the previous 25 percent tariffs on cars.

Trump on Wednesday announced a 90-day pause of tariffs on all countries excluding China, citing “flexibility,” only 13 hours after they'd taken effect, again flip-flopping on his earlier insistence that a pause wasn't an option. The tariff rate for Korea will stay at 10 percent for the next three months, while China was slapped with 125 percent and 85 percent, vice versa.

“Trump may have ceased it out of concern for its serious impact on the U.S. stock market, inflation and the potential political risk it would bring to him. Korea must take this chance prudently to prepare what he really wants from us,” said Heo Yoon, professor of international trade at Sogang University’s Graduate School of International Studies.

“Korea may offer negotiations on the 25 percent auto tariffs based on what they bring to Trump in a packaged deal,” Heo said. “Since it was once paused, it will be unlikely that the same 25 percent will be applied again.”

U.S. President Donald Trump's comments after a 28-minute phone call with Korea's acting president, Han Duck-soo on April 8. [SCREEN CAPTURE]

The announcement came a day after acting President Han Duck-soo had a half-hour phone call with Trump on Tuesday, where the U.S. president said they discussed Korea’s nontrade barriers, shipbuilding and large-scale purchase of U.S. liquefied natural gas, calling it a “one-stop shopping.”

Though the specific details of the talks have not been disclosed, it is likely that Han showed his intention to accommodate Trump’s demands. Kevin Hassett, the director of the National Economic Council, evaluated the discussion as “heck of a lot of concessions on the table.”

Han on Thursday hinted at easing some regulations for U.S. companies cited as “nontrade barriers” by Trump.

“If regulations are relieved, it helps not only foreign companies, but also ours,” Han said during a meeting with ministers on Thursday. “The Trump administration’s evidence on 25 percent reciprocal tariffs include Korea’s tariff and tax level [against the United States] and our nontrade barriers.”

A liquefied natural gas carrier built by HD Hyundai Heavy Industries [HD KOREA SHIPBUILDING & OFFSHORE ENGINEERING]

He advised ministers to consider the importance of international trade for Korea and its effects on “job creation, growth and the long-term development of the country.”

Experts say it’s time for Korea to concede on what it can do, but also come up with the most effective bargaining chips, for the lowest cost, that can persuade Trump.

“By helping the U.S. shipbuilding industry, it could also be a win-win approach for Korean companies in their external expansion, along with the related sectors that will also get a boost, such as steel,” said Cho Soo-jung, a professor of international trade law at Korea University.

“Trump has also warned of a sectoral tariff on semiconductor and pharmaceuticals, so the 90-day period will be very critical for Korea.”

BY SARAH CHEA [[email protected]]