Former U.S. negotiator on Korea's tariff talks: 'You're going to have to give Trump something'
Published: 23 Jul. 2025, 13:50
![Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]](https://koreajoongangdaily.joins.com/data/photo/2025/07/23/fe8d5eec-1800-4ff2-bdd0-8a0044d93c34.jpg)
Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]
WASHINGTON ― Stephen Vaughn, former acting U.S. trade representative (USTR), said Tuesday that it is “not realistic” to expect the United States to continue tolerating a trade structure in which it incurs a larger deficit than the volume it exports to Korea.
“I think you have to have a very serious and candid recognition that it is not realistic to expect the Americans to continue running these huge current account deficits,” Vaughn said during a meeting with correspondents in Washington.
“If this current trade deficit is not resolved on a multilateral basis, it will be resolved on a unilateral basis, because the Americans will not go on like this.”
Vaughn, who played a key role in trade policy during the first Trump administration, said that the U.S. government “made it very, very clear that a world in which trade is this imbalanced is not a sustainable world for the U.S. It’s got to be more balanced. We have got to produce more, and other countries have got to consume more. That's just essential for us.”
Vaughn said the Trump administration’s tariff policies were driven by the belief that the current trade deficit is unsustainable. Referring to Korea, one of the eight countries that has a trade surplus with the United States, he said, “Now I think that if you’re a surplus country, you have to decide, are you willing to have a more balanced trading system, or are you just going to keep trying to hang on to these surpluses until the whole system falls apart?”
During the interview session, Vaughn repeatedly emphasized the need for a “rebalanced system,” and that “we don’t have a choice […] you're going to have to give [Trump] something that he likes more than he likes the tariffs.”
He declined to comment on whether the Lee Jae Myung administration’s recent push to improve inter-Korean relations could affect tariff negotiations, saying, “That’s more of foreign policy. I’m more of a trade guy.”
Asked whether Lee could resolve trade issues through a Korea-U.S. summit, Vaughn said, “the negotiations normally take place at a ministerial level,” adding, “I think that’s usually the best way to proceed. And I think efforts to shortcut that process […] I don't think that's usually a good idea.”
A trade lawyer by profession, Vaughn worked for 14 years at the same law firm as Robert Lighthizer, the USTR under the first Trump administration. Vaughn served as general counsel at the USTR’s office during the renegotiation of the Korea-U.S. FTA. He is currently a partner in the international trade team at law firm King & Spalding, representing the interests of U.S. steel companies. Jamieson Greer, the current USTR, worked at the same firm.
The following interview has been edited for length and clarity.
![U.S. President Donald Trump participates in a reception with Republican lawmakers in the East Room at the White House in Washington on July 22. [EPA/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/07/23/8028e416-5649-4d1e-b990-42ff42f67a52.jpg)
U.S. President Donald Trump participates in a reception with Republican lawmakers in the East Room at the White House in Washington on July 22. [EPA/YONHAP]
Q. What could Korea offer to the United States to persuade the United States to lower the 25 percent tariffs? And what should be the realistic expectation?
A. I would look very closely at the deal that they made with the United Kingdom [...] I think that's about as low as they're going to bend. The steel tariffs and the auto tariffs and some of the other tariffs according to Section 232 of the Trade Expansion Act are extremely sensitive. They view those as national security methods, and they're going to be very, very cautious about giving more access to the U.S. market.
Why are steel and automobiles such sensitive sectors for the United States?
I think the administration is under enormous political pressure to have a healthy steel industry and to have a healthy auto industry. I think you guys should assume that whoever runs for president in 2028 is going to talk about having a healthy American steel industry and having a healthy American auto industry. The Americans are not going to concede those two industries. They’re not going to do it.
So the ability of the Americans to continue giving away parts of steel industry and parts of the auto industry is just really, really limited. [...] People will be setting themselves up for disappointment if they think that somehow they're going to avoid the steel and auto terms.
![Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]](https://koreajoongangdaily.joins.com/data/photo/2025/07/23/de5fd587-ee42-4eec-9533-d55cb52fa91f.jpg)
Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]
The Korean government is going all in on last-minute negotiations this week. What’s your take on that effort?
You have to understand the problems that these trade deficits are creating in other countries. O.K., we have populism. The U.K., which is another big trade deficit country, they had, they obviously had populism. They ended up having to leave the EU [European Union] altogether. Mexico, another big trade deficit country, they've had a populist uprising. Brazil, another big trade deficit country, they've had a populist uprising. So this has happened in country after country after country where this is. Now I think that if you're a surplus country, you have to decide, are you willing to have a more balanced trading system, or are you just going to keep trying to hang on to these surpluses until the whole system falls apart?
Korea is one of the largest direct investors in the United States. Do you think increased investment will help in the negotiations?
Every year, Korea runs a very, very large surplus with the United States. We know that the Korean business community, the Korean people, are far too intelligent to hold that $40 billion a year, or whatever it is that you get in cash. Of course, you're going to reinvest it in the United States. So, to come to the Americans and say, we want to invest more in America. Of course, you're going to invest more in America. That's not a concession. That's something that you're going to do regardless. So, I don't think it's going to help you all that much to say we'd like to make more investments in America.
![Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]](https://koreajoongangdaily.joins.com/data/photo/2025/07/23/8049c65f-02b1-4063-911e-6f5449139fa3.jpg)
Stephen Vaughn, former acting U.S. Trade Representative, speaks during a meeting with correspondents in Washington on July 22. [KANG TAE-HWA]
Isn’t Korea already engaged in free trade with the United States under the FTA?
And the result of that agreement was, is that your sales to us went up enormously, and our sales to you didn't really move all that much because we still ran into lots of regulatory problems. We basically lost almost our entire shipbuilding. All I can say is this, we tried it and it didn't work. I don't think we're going to continue down a path that has been such a mistake for us.
What kind of proposals do you think Korea should bring to the table?
The Americans are not going to continue a system where they're having to pay out a trillion dollars in assets every year to cover their consumption. And so, if I were a country that wanted to have a more stable system, I would try to come up with proposals to make that system more favorable for the Americans than it is now. But I don't think it's realistic to keep going to the Americans and saying you have to go back to the way things were in 2015. We voted on this like three times, we're not going back to the way it was.
Would a significant increase in defense spending help Korea's position in the negotiations?
I think that would be kind of hard to say. I mean, you know, for example, the Europeans have agreed to spend more on defense, and the president still said he was going to put a 30 percent tariff on them. In the 1970s and 1980s we were in the middle of a Cold War, and we were very concerned about allies and maintaining alliances, and yet we had very hard-fought trade negotiations with the Europeans and Japanese. So, I think it would be a mistake to assume that all the Americans are looking for here is more defense spending.
BY KANG TAE-HWA [[email protected]]
with the Korea JoongAng Daily
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