Seoul: Korea and the United States are set to commence bilateral negotiations next week concerning tariffs imposed by U.S. President Donald Trump. U.S. Treasury Secretary Scott Bessent has identified Korea as one of the five priority negotiation partners, alongside the United Kingdom, Australia, India, and Japan. Acting President and Prime Minister Han Duck-soo has emphasized his commitment to maintaining "friendly momentum" in the trade discussions and is prepared to directly engage with Trump if necessary. Recently, Trump has issued a 90-day pause on reciprocal tariffs, which for Korea were initially set at 25 percent.
According to Yonhap News Agency, Han mentioned the potential establishment of a negotiation system encompassing all sectors to initiate talks promptly for detailed measures. He categorized the issues into three primary areas: trade imbalance, shipbuilding, and the Alaska liquefied natural gas (LNG) project. Finance Minister Choi Sang-mok is scheduled to meet with Bessent next week, and several other Korean officials are traveling to the U.S. for discussions. A preliminary videoconference between Korea and the U.S. has already taken place regarding potential cooperation on the Alaska LNG project.
With Bessent highlighting a "first-mover-advantage," initiating negotiations swiftly could benefit Korea amidst the tariff conflict. Korea's export-reliant economy has been affected by 25 percent tariffs on aluminum and steel, a 25 percent tariff on cars, and a 10 percent universal tariff impacting all countries. Although the tariffs have been postponed for three months, their eventual implementation could further strain the Korean economy. The caretaker government under the acting president has been actively addressing these challenges.
As Han spearheads the trade negotiations, concerns arise over the pace of talks, especially concerning the Alaska LNG project. Trump is reportedly interested in Korea, Japan, and Taiwan participating in the estimated $44 billion project. For the U.S., it presents a new export route for LNG, while for Korea, participation could lead to tariff relief and stronger leverage in defense cost-sharing discussions.
With South Korea's snap presidential election scheduled for June 3, the Democratic Party of Korea (DPK) is urging the caretaker government and Han to approach negotiations prudently. The DPK, with a strong chance of winning the election, may be cautious about concluding negotiations while other nations carefully consider their strategies in the trade war. Korea may collaborate with Japan and Taiwan on the LNG project.
Meanwhile, China has intensified its cooperation with the European Union and Southeast Asian countries, imposing reciprocal tariffs of 125 percent against the U.S. and restricting exports of rare earth minerals and magnets crucial for mobile phones and electric vehicles. Given that China accounts for approximately 60 percent of global rare earth production, this serves as a significant negotiating tool. Japan, recognizing the tariff situation as a "national crisis," has stated it will proceed cautiously without retaliating with reciprocal tariffs against the U.S., as it is not in its national interest. Seoul should closely monitor these developments while seeking gains in early negotiations with the U.S.
No final decision has been made regarding Alaska's LNG project. It is hoped that the government officials responsible for the bilateral trade and tariffs negotiations will prioritize national interests. These negotiations should remain bipartisan, avoiding personal or political attacks. If necessary, the government should transparently share proceedings with major political parties. In the event of a government transition, maintaining continuity and sustainability in Seoul's bargaining position in the escalating trade war is crucial.