No assurance yet from U.S. on extending tariff grace period for Korea, minister says

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No assurance yet from U.S. on extending tariff grace period for Korea, minister says

Published: 28 Jun. 2025, 17:11 Updated: 29 Jun. 2025, 14:11

PARK EUN-JEE
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Audio report: written by reporters, read by AI

Trade Minister Yeo Han-koo speaks during a meeting with reporters at the South Korean Embassy in Washington on June 27. [YONHAP]

The Korean government considers the ongoing Korea-U.S. tariff negotiations a top priority and views them as a chance to reset the bilateral economic framework into a more strategic partnership, said Trade Minister Yeo Han-koo during his visit to the United States.

“This is not just a tariff negotiation,” Yeo said during a press briefing in Washington on Friday. “It is an opportunity to build a new framework for cooperation — a manufacturing renaissance partnership between the two countries.”

He acknowledged the negotiations had been delayed due to domestic political circumstances in Korea but said the Lee Jae Myung administration now intends to approach the talks from a pragmatic standpoint aimed at maximizing national interest.

Trade minister Yeo Han-koo, right, poses with U.S. Trade Representative Jamieson Greer, left, and Commerce Secretary Howard Lutnick, center, in Washington on June 23. [YONHAP]

A senior government official cautioned, however, that the possibility of the United States extending tariff exemptions under its reciprocal tariff policy should not be taken for granted.

M eetings continue as deadline looms

Yeo, the first high-ranking Korean official to visit Washington under President Lee Jae Myung’s administration, met with a number of key U.S. officials during his trip. His meetings included Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer and Doug Burgum, chairman of the National Energy Commission and Secretary of the Interior.

He also held talks with House Speaker Mike Johnson, House Ways and Means Committee Chairman Jason Smith and Sen. Todd Young.

Trade Minister Yeo Han-koo, right, poses for a photo with Jason Smith, chairman of the House of Representatives' Ways and Means Committee, during their meeting in Washington on June 25. [YONHAP]

The timing of Yeo’s visit drew attention as it came ahead of the July 8 expiration of the tariff pause announced by U.S. President Donald Trump. Under that policy, countries like Korea could face renewed reciprocal tariffs if no agreement is reached.

“The current trade environment is highly uncertain and severe,” Yeo said. “We will work closely with the United States to ensure that the momentum built over decades of Korea-U.S. cooperation is not weakened by these tariff measures.”

He emphasized that Korea is proposing a mutually beneficial partnership in a wide range of sectors — including artificial intelligence, semiconductors, biotechnology, electric vehicles, batteries, shipbuilding, defense and nuclear energy.

“We highlighted the potential for Korea and the United States to build complementary ties across key manufacturing industries,” Yeo said. “The U.S. side responded very positively.”

Supply chains and steel tariffs in focus

During the meetings, the Korean delegation stressed the deep integration of industrial supply chains — particularly in shipbuilding — and argued that minimizing tariffs would be beneficial to both economies.

Talks also included efforts to eliminate or reduce tariffs already in place or expected to take effect on Korean exports such as automobiles and steel. Those tariffs include a proposed 25 percent reciprocal tariff on Korea, which the Trump administration has previously signaled.

Despite some speculation in Washington that the tariff grace period could be extended, a senior Korean official said no clear decision has been made.

“There is no certainty that the exemption will be extended across the board,” the official said. “Some countries may continue negotiating after the exemption expires, while others may face high tariffs. Nothing is off the table.”

Digital regulations

Tensions were further heightened after President Trump posted on social media that Canada’s digital services tax, which targets revenue from online marketplaces, advertising and user data, was an attack on the United States.

“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump said in his post.

A Korean government official expressed concern about similar scrutiny being directed at Korea.

“The United States has publicly raised concerns about Korea’s platform regulations,” the official said. “We must manage these issues carefully to prevent further trade friction that could harm our economy.”

Section 232 and China-related pressure

The official also addressed whether tariffs on Korean autos and steel — imposed under Section 232 of the U.S. Trade Expansion Act — could be eased. “It’s a very difficult issue,” the official said.

When asked whether the United States had requested stronger cooperation from Korea to counter China in areas like export controls and supply chains, the official replied, “Geopolitical concerns about U.S.-China competition are real, but the U.S. Department of Commerce and USTR are currently focused on economic issues in these negotiations.”

The official added that Korea has not yet received the so-called “tariff letter” that President Trump said would be sent to countries that fail to strike a deal with the United States.

“Even if that happens, we will continue our efforts to reduce uncertainty and pursue a pragmatic resolution until the very end,” the official said.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KANG TAE-HWA [[email protected]]