South Korea struggles with uncertainty over U.S. trade negotiations

Seoul – While the Trump administration has produced commercial threats this week, South Korea, a crucial trading partner and a military ally, has trouble – like many – to navigate the uncertainty that is looming about commercial negotiations with Washington.

Trump on Monday sent a news letter price to 14 countries including South Korea, which was 25% hit tax. The direct debits were to come into force on Tuesday, but were postponed to August 1. Trump left the door open for another extension, telling journalists that the new deadline was “firm but not 100% firm”, according to business partners.

But it is not clear if the additional three weeks will be sufficient to resolve long -standing disagreements between Washington and Seoul. One of the biggest discord is the automotive industry in South Korea, which was the third largest car exporter in the United States last year.

Although the White House press secretary Karoline Leavitt said on Monday that Trump’s phone rings “up to world leaders all the time that begged him to conclude an agreement”, the Seoul tone was reserved.

Commerce secretary, Howard Lunick, on the left, crosses the Tarmac on Sunday while President Trump Board Air Force One. Trump on Monday dictated new rate rates in 14 countries, including a 25% tax on South Korea.

(Jacquelyn Martin / Associated Press)

Last week, before the initial deadline of July 8, South Korean president Lee Jae Myung, Who took office last month, said: “It is difficult to say with certainty that we can finish [the trade talks] by July 8 “

“The two parties do their best and we must find a result that can be mutually beneficial for both parties, but we have still not yet been able to clearly establish what each party wants,” he added.

Since then, senior South Korean trade officials have been sent to Washington in the hope of concluding a striking distance agreement.

“It’s time to accelerate negotiations and find an landing area,” the Minister of Trade Yeo Han-Koo said on Monday after meeting US secretary for trade Howard Lux.

So far, the only two countries that have concluded new trade agreements with the Trump administration are the United Kingdom and Vietnam.

But the Lee administration has maintained a note of prudence. During a high-level meeting held Tuesday to discuss the current state of negotiations, Lee’s presidential staff chief Kim Yong-Beom would have stressed “national interest” compared to rapid agreements, asking those responsible to support the industries affected by prices and “diversify” the export markets of South Korea.

Under a free trade agreement of several decades, the South Korean prices on most American goods are already zero, which means that there are fewer concessions that Seoul can offer, according to analysts. And on key discord points such as automobilesThere is little daylight to find.

“This announcement will send a frightening message to others,” said Wendy Cutler, vice-president of the Asia Society Policy Institute based in Washington, and former Deputy Trade negotiator, in an article on X.

Trump’s letter also suggested that the United States “will not be open to the reprehe” sectoral prices, including those of cars, added Cutler.

South Korean trade officials have stressed that the considerably abolition or reduction of prices of 25% on cars is an absolute priority.

The White House press secretary Karoline Leavitt holds a commercial letter sent by the White House to South Korea during a press conference on Monday.

(Al Drago / Bloomberg via Getty Images)

But the South Korean cars of Hyundai and Kia considerably de factor the trade deficit of $ 66 billion that Trump denounced as unfair. Last year, South Korea was the third largest car exporter in the United States, up to $ 34.7 billion. He bought $ 2.1 billion in cars in the United States

So far, the country’s flagship manufacturers Hyundai And Kia were able to bypass all major pricing shocks, rather making sales instead of the first half by selling the existing inventory in the United States

But many believe that it is only a matter of time until they will have to increase the prices of the stickers, as some competitors have done. The operating profits of the two companies should now reach two -digit decreases compared to the previous year.

The United States would also have demanded concessions that approach sensitive questions of food or national security in South Korea – a much more difficult sale to the public than extended manufacturing cooperation than South Korea has sought to center in commercial talks.

Among these, the opening of the rice market in South Korea to American imports and allowing Google to export high-precision geographic data to its servers outside of South Korea.

As an essential culture which represents an important part of farmers’ income, rice is one of the rare goods strongly protected in trade relations in South Korea. Under its free trade agreement with the United States, Seoul imposed a 5% price on American rice up to 132,304 tonnes and 513% for everything.

The American army soldiers attend a ceremony last month in Dongducheon, South Korea. A 2021 US Government Accountability Office report revealed that it cost $ 19.2 billion to keep American troops in South from 2016 to 2019.

(Images Kim Jae-Hwan / Sopa via Getty Images)

The South Korean government has long denied Google requests to export high -precision geographic data – which is used for business mapping services – on the grounds that it could reveal sensitive military sites which are essential for defense against North Korea. Last year, Ukraine accused Google of having exposed the locations of some of its military systems to Russia.

Trump’s long -standing requirements Seoul should pay more To accommodate the 28,500 American soldiers stationed in South Korea.

“South Korea earns a lot of money, and they are very good. They are very good, but you know, they should pay for their own army,” Trump said at a meeting of the cabinet at the White House on Tuesday, adding that he had declared to South Korea that he should pay $ 10 billion a year.

Over a period of four years from 2016 to 2019, the total cost of maintaining American troops in South Korea was $ 19.2 billion, or about $ 4.8 billion per year, according to a 2021 US Government Accountability Office report. During this period, South Korea to foot around 30% of the total annual costs, in addition to providing indirect financial support such as lifting taxes or renowned rents.

Under the agreement of special measures, the joint framework that governs this arrangement, Seoul payments have increased over time. As part of the latest version, which covers 2026 to 2030, Seoul’s annual contribution from next year will be $ 1.19 billion, an increase of 8.3% compared to 2025 and will increase each year thereafter.

Trump’s demand for almost 10 times – as well as the threats that the United States could withdraw its troops from the country – previously attracted a widespread indignation in the country, stimulating calls by some for the development of specific nuclear arsenal in South Korea.

“THE Special Measures Agreement (SMA) guarantees stable conditions for American troops stationed in Korea and strengthens the joint posture of South Korea – US Defense, “said a spokesperson for the South Korea Ministry of Foreign Affairs in response to Trump’s comments.

“Our position is that the South Korean government will adhere to the 12th SMA, which was agreed and implemented legitimately.”