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With tariff pressure eased, Korea needs a smarter trade strategy

Published: 14 May. 2025, 00:00

U.S. Secretary of the Treasury Scott Bessent and U.S. Trade Representative Jamieson Greer attend a news conference after trade talks with China, in Geneva, Switzerland, May 12, 2025. [REUTERS/YONHAP]

A recent breakthrough between the United States and China to slash tariffs for 90 days has prompted swift recalibrations among other countries negotiating with Washington. The unexpected scale of the deal — dropping tariffs from 145 percent to 30 percent — sparked optimism in Seoul that Korea, a longstanding U.S. ally and FTA partner, might also benefit from lower tariffs. But such expectations may be premature.

The United States appears determined to preserve a “default tariff” of 10 percent, even as it negotiates deals with key partners. Britain agreed to expand imports of American beef, ethanol, agricultural products and aircraft, yet received no exemption from that baseline rate. China secured a sharp tariff reduction but still faces a 10 percent base levy and an additional 20 percent imposed over fentanyl-related disputes. In its earlier talks with Japan, the the United States agreed to reduce only 14 percentage points of a 24 percent tariff, refusing to budge on the rest — prompting backlash from Tokyo.

Against this backdrop, Jamieson Greer, the U.S. Trade Representative, is scheduled to visit Korea on May 15 and 16 for a follow-up to the high-level “2+2” economic talks held in April. His visit is widely seen as a turning point in Korea-U.S. trade negotiations. Korea’s government must closely analyze other countries’ negotiating outcomes and respond with a tailored, strategic approach.

Korea has bargaining tools Washington finds valuable. These include collaboration in shipbuilding, participation in the Alaska LNG project and cooperation on export controls to China in the name of economic security. President Donald Trump, on May 9, said nations willing to offer “something special” could receive exceptions even to the base tariff. That signal offers an opening.

Securing a reduction in the steep 25 percent reciprocal tariffs imposed on Korean exports should remain Korea’s top priority. But Seoul would also benefit from a more targeted strategy focused on core sectors — particularly autos and steel. The UK, for instance, accepted quota-based allocations in exchange for reduced car tariffs (from 25 to 10 percent) and exemptions for steel and aluminum. Japan is pursuing a similar outcome centered on automobile exports, its top U.S.-bound item.

Former Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, right, and Minister of Trade, Industry and Energy Ahn Duk-geun, who serve as joint chief delegates for the Korea-U.S. 2+2 Trade Talks, attend a meeting of the Economic Security Strategy Task Force at the Government Complex Seoul on April 21, 2025. [YONHAP]

Korea must calculate carefully what it is willing to offer and what it expects in return — and weigh how any trade-offs will affect domestic industries. These negotiations could trigger internal frictions among stakeholders, so the government must prepare for those challenges in advance.

The urgency is underscored by recent data from the U.S. Department of Commerce: Korea was the only one among the top 10 U.S. export partners to post a year-on-year decline in the first quarter, down 1.3 percent. The drop was largely driven by falling shipments in autos, auto parts and steel.

With economic stakes high, Korea must adopt a strategy that is both pragmatic and precise to protect its national interest.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.