Trump tariffs pushed to Aug. 1, granting Korea crucial negotiating window

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Trump tariffs pushed to Aug. 1, granting Korea crucial negotiating window

Published: 08 Jul. 2025, 18:28 Updated: 11 Jul. 2025, 15:36

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Trade Minister Yeo Han-koo, right, shakes hands with U.S. Commerce Secretary Howard Lutnick after a meeting on tariffs in Washington on July 7. [MINISTRY OF TRADE, INDUSTRY AND ENERGY]

[NEWS ANALYSIS]

With the Trump-proposed 25 percent tariffs now pushed back to Aug. 1, the Korean government faces the uphill task of mitigating the duties while simultaneously fine-tuning regulatory reforms on digital policy and U.S. beef imports.

Trade Minister Yeo Han-koo and National Security Adviser Wi Sung-lac flew to Washington to meet with their U.S. counterparts to discuss the timing and terms for seeking relief from the reciprocal tariffs as well as the 25 percent and 50 percent duties that have been imposed on automobiles and steel since March and April, which dealt a huge blow to the country's mainstay exports.

Trump sent a letter to President Lee Jae Myung on July 7 specifying that the United States would charge Korea 25 percent reciprocal tariffs, separate from sectoral tariffs, starting on Aug. 1, pushing the deadline initially set for starting on Wednesday.

“We have concluded that we must move away from these longterm, and very persistent, Trade Deficits engendered by Korea’s Tariff, and Non Tariff, Policies and Trade Barriers,” the White House said in the letter addressed to “His Excellency Lee Jae-myung,” adding that the 25 percent number “is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country.”

In an effort to reach a consensus, Korea has continued to emphasize its willingness to reform domestic regulations while also proposing avenues for cooperation in shipbuilding and energy to support a U.S. manufacturing renaissance.

“It is now critical that we accelerate negotiations and identify a viable landing zone,” said Yeo after meeting with the U.S. commerce secretary, emphasizing that Korea is the “optimal partner in the revitalization of American manufacturing.”

“We will spare no effort in crafting a concrete framework for Korea-U.S. manufacturing cooperation that yields mutually beneficial outcomes,” Yeo said. “Although we’ve secured roughly three more weeks until Aug. 1, time is still limited.”

U.S. President Donald Trump's letter to President Lee Jae Myung specifies that he will impose 25 percent tariffs on Korean products starting on Aug. 1. [SCREEN CAPTURE]

U.S. President Donald Trump speaks in the Blue Room of the White House in Washington on July 7. [EPA/YONHAP]

Yeo also emphasized that the removal of sectoral tariffs, particularly on key sectors such as automobiles and steel, must be included on the negotiation table.

Wi on Monday also had high-level consultations with U.S. Secretary of State Marco Rubio on advancing the Korea-U.S. alliance.

Issues such as expanding U.S. beef imports and easing digital regulations remain highly sensitive in Korea and are likely to face strong public opposition, prompting Seoul to proceed with extreme caution.

Washington has continued to press for the removal of restrictions on U.S. beef from cattle older than 30 months, limitations that have been in place since the 2008 mad cow disease crisis, after which Korea allowed only younger cattle imports.

“By the logic of the former Trump administration, since Korea runs an agricultural trade deficit with the United States, we too should be entitled to impose reciprocal tariffs," Yeo said.

Washington also claimed Korea's restrictions on agricultural biotechnology, including the living modified organisms law, present challenges to U.S. agricultural exports.

National Security Adviser Wi Sung-lac, left, and U.S. Secretary of State Marco Rubio shake hands after a meeting on tariffs in Washington on July 7. [PRESIDENTIAL OFFICE]

Digital-related laws, such as regulatory measures targeting online platforms like Apple and Google, and the imposition of network usage fees have emerged as key points of contention in the tariff negotiations.

However, these are demands that Seoul finds difficult to concede because they are closely tied to the protection of smaller domestic digital companies and consumers, fairness for local content providers and the safeguarding of sensitive military infrastructure.

A central element of the proposed online platform act, currently being advanced by Korea’s Fair Trade Commission, aims to prohibit unfair practices such as forced bundling and contract disadvantages and imposes stringent penalties for violations. The legislation has been elevated to a core economic pledge of the Lee administration.

Google’s request to transfer Korea’s high-precision map data overseas is also a contentious issue, raising significant national security and digital sovereignty concerns.

Korea is already feeling the strain due to Trump's tariff war. Korea’s exports to the United States in the first half of this year fell 3.7 percent to $62.18 billion, according to data from the Ministry of Trade, Industry and Energy. Automobiles dropped by 16.8 percent and general machinery by 16.9 percent.

Failure to reach a final tariff agreement could result in a decline of up to 0.4 percentage points for Korea’s real GDP, according to a recent estimate by the Korea Institute for International Economic Policy.