South Korea’s Trade Minister Considers Tariff Extension

By Hyunjoo Jin and Ju-min Park

SEOUL (Reuters) – South Korea’s Trade Minister Yeo Han-koo mentioned on Friday that he might request an extension of the freeze on U.S. tariffs, set to expire soon, during his upcoming talks in Washington with U.S. officials.

Yeo, recently appointed as South Korea’s trade envoy, plans to fly to the U.S. and conduct discussions with U.S. Trade Representative Jamieson Greer and other senior officials on Saturday, just before the July 9 deadline when U.S. tariffs could increase significantly.

U.S. President Donald Trump stated his administration would begin notifying countries on Friday regarding the tariff rates they will face on imports to the U.S.

Yeo emphasized that the substance of negotiations is more critical than the deadline, as he plans to urge the U.S. to extend the timeframe and expedite discussions to achieve a “win-win” agreement.

South Korea is seeking exemptions from Trump’s tariffs on automotive and steel imports, alongside the 25% “reciprocal” levy currently suspended pending negotiations. The country, which faces a 10% blanket tariff, previously agreed with the U.S. to work towards reducing tariffs before the July deadline in their initial trade talks held in late April.

However, little progress has been made in talks, obstructed by political uncertainty following South Korea’s martial law crisis and the election of President Lee Jae Myung on June 3.

On Thursday, President Lee noted that discussions with Washington had been challenging, and clarity on mutual priorities was lacking.

Minister Yeo remarked during a parliamentary hearing on Friday that Washington demands greater access to agricultural and automotive sectors, as well as enhanced market access and equitable treatment in the digital space.

Yeo expressed the government’s commitment to respond flexibly to U.S. demands while considering domestic political sensitivities. He also mentioned that the U.S. requests larger South Korean investments and increased imports of American energy supplies.

Although South Korea is interested in a $44 billion LNG project in Alaska, the project’s feasibility remains uncertain, with more information expected from the U.S. later in the year.

During Yeo’s hearing, lawmakers urged a careful evaluation of the Alaska investment. Lee Chul-gyu from the opposition People Power Party remarked, “Once (we’re) in the wrong place, it is hard to get out.”

The backdrop of these negotiations coincides with Trump announcing a 20% tariff rate on imports from Vietnam, down from an initially threatened 46%. Yeo noted that South Korean companies leveraging Vietnam as a manufacturing hub would be impacted by these tariffs.

Prominent South Korean firms like Samsung Electronics have invested billions into expanding their operations in Vietnam.