Seoul: Facing the dual challenges of the United States' aggressive tariff scheme and sluggish domestic demand, President-elect Lee Jae-myung is expected to prioritize securing a favorable trade deal with Washington and implementing measures to revitalize the stagnant economy through supplementary budgets and the promotion of advanced industries, experts said Wednesday.According to Yonhap News Agency, Lee's initial focus is on trade negotiations with U.S. President Donald Trump, as Washington's sweeping tariff policies have significantly impacted South Korea's trade-dependent economy. The new government is tasked with concluding negotiations with the U.S. before July 9, when Trump's 90-day suspension of high global tariffs is set to expire. A comprehensive "package" agreement covering trade and related issues is being pursued before the deadline.Lee has emphasized the importance of engaging in "reasonable and rational conversations" with Trump to reach mutually beneficial solutions. Former Trade Minister Y eo Han-koo noted that the leadership vacuum in recent months may have contributed to the imposition of high tariffs on South Korean products, making summit-level diplomacy crucial for resolution.Beyond trade negotiations, Lee is also addressing South Korea's economic performance, which saw a 1.3 percent decline in exports in May, with significant drops in shipments to the U.S. and China. During the first quarter of the year, South Korea's real GDP contracted by 0.2 percent, marking the first contraction in nine months. The Bank of Korea has adjusted its economic growth forecast for the year to 0.8 percent, down from a previous projection of 1.5 percent.In response to these economic challenges, the Lee government is expected to propose a supplementary budget soon, with plans for an additional budget of at least 30 trillion won. This comes on top of the 13.8 trillion-won supplementary budget approved last month by the National Assembly. Lee aims to reduce dependence on the U.S. and China by strengthening tr ade relations with other partners.Lee also envisions a transformation of South Korea's economy through artificial intelligence and other advanced technologies. He plans to create a 100 trillion-won fund in partnership with the private sector to position the country among the world's top three AI powers. Additionally, Lee is committed to making significant investments in research and development across various advanced industries.To boost the local stock market, Lee has pledged to double the country's benchmark KOSPI index and promote shareholder interests and corporate values. He is likely to approve a revised Commercial Act to better protect minority shareholders and has emphasized eradicating stock manipulation to restore investor trust.Looking to the future, structural reform is an urgent priority for Lee's administration, with South Korea grappling with an aging and shrinking population. The country's potential growth rate is projected to decline due to demographic changes, and the current ultra-low birth rate could lead to negative economic growth after 2050. Professor Yang Joon-seok of the Catholic University of Korea highlights the need for comprehensive labor policy and pension reform as South Korea enters a super-aged society.
- September 3, 2026
