Trump turns up heat in trade negotiations: 'If you pay like Japan, tariffs can be lower'

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Trump turns up heat in trade negotiations: 'If you pay like Japan, tariffs can be lower'

Published: 25 Jul. 2025, 19:48

Audio report: written by reporters, read by AI

U.S. President Donald Trump gestures during an event in Washington on July 23. [REUTERS/YONHAP]

With just over a week left before the United States imposes reciprocal tariffs on Aug. 1, the collapse of the anticipated “2+2” trade talks has left Korea in a precarious position — as U.S. President Donald Trump continues to increase pressure.

Trump has targeted negotiating countries, telling them “If you pay like Japan, tariffs can be lower” and also emphasizing market opening. Experts point out that in order to break the deadlock in Korea-U.S. negotiations, Korea must present a definite “trophy” — or pretext — that Trump can promote, just as Japan did.

During a visit to the Federal Reserve headquarters in Washington on Thursday, Trump said, “I would allow other countries to pay and buy [tariffs] down,” and added, “Market opening is more valuable than the $550 billion Japan paid.”

Trump’s remarks also apply directly to Korea-U.S. tariff negotiations, where an unusual current is flowing. They are a call to further increase Korea’s U.S. investment, which is being discussed at more than $100 billion, and to raise the level of agricultural market opening — which is believed to have contributed to the collapse of the “2+2” talks.

Countries that have already reached early agreements with the United States — including Japan, Britain, Vietnam, Indonesia and the Philippines — all offered agricultural market access as part of their deals. Even Australia, still in negotiations, has preemptively opened its beef market.

Trump also posted on Truth Social Friday that Australia had negotiated to accept U.S. beef, adding, “The other countries that refuse our magnificent beef are on notice.”

Kim Yong-beom, presidential chief of staff for policy, left, and Wi Sung-lac, national security adviser, attend a briefing at the presidential office on July 25. [NEWS1]

One diplomatic source revealed that during negotiations, U.S. officials demanded “specific figures” for the amount of agricultural goods countries like Korea would import.

Domestically, speculation is growing that the abrupt cancellation of the trade talks also touches on Korea’s firm stance on rice and beef market protections, which triggered dissatisfaction on the U.S. side.

A trade expert explained that agricultural market openings are being used by Trump as “trophies” to showcase the results of his tariff wars. Yet many experts also point out that market openings won’t necessarily lead to massive surges in U.S. exports.

For example, Japan agreed to increase the share of U.S. rice imports without changing the total import volume of 770,000 tons per year, boosting U.S. rice’s share from 45 percent to 78 percent. Based on current market prices, that shift increases U.S. rice imports to Japan from $95.5 million to $163.76 million — not a game-changing sum.

Cars ready for export are lined up at a port in Pyeongtaek, Gyeonggi, on July 24. [NEWS1]

Similarly, Japan agreed to ease entry for U.S. cars and trucks, waiving additional inspections and promoting U.S. vehicle sales domestically. But given that Japan imports only around 16,000 U.S. cars annually compared to exporting 1.4 million to the U.S., the economic impact on Japan is minimal.

The opening of the automobile market also largely reflects Japan’s “pragmatic concession.” In fact, within the U.S., particularly among the auto industry, complaints have emerged that “Trump gave too much away to Japan,” following the reduction of tariffs on Japanese cars from 25 percent to 15 percent.

The $550 billion investment pledge Japan made is also being questioned. Trump promoted it as a “signing bonus,” but Japan claims the figure includes loans and guarantees. The total equals roughly 14 percent of Japan’s GDP, raising doubts about its feasibility.

Bloomberg cited a Peterson Institute study showing that China, during Trump’s first term, pledged to buy $200 billion in additional U.S. goods in exchange for tariff relief — but only fulfilled 58 percent of that promise.

U.S. beef is displayed at a grocery store in Seoul on July 23. [YONHAP]

Veronique de Rugy, a senior fellow at the Mercatus Center think tank, pointed out that rather than a serious trade announcement, the deal is nothing more than a fantastical claim better suited for a campaign rally.

Still, domestic experts say Korea must strike a careful balance.

“Japan made smart concessions on less impactful sectors and presented an investment plan Trump could brag about,” said Heo Yoon, a professor at Sogang University’s Graduate School of International Studies. “Korea must likewise analyze the impact on its economy and craft a proposal Trump can sell politically.”

Yet, Korea’s challenges remain daunting. Opening the rice and beef markets would provoke backlash from farmers and lawmakers alike.

Agriculture industry civic groups and farmers attend a rally protesting the removal of livestock and agricultural product barriers in Korea-U.S. tariff negotiations on a street in Yongsan District, central Seoul, on July 25. [NEWS1]

Expanding U.S. investments is also difficult — the government is considering more than $100 billion in investments from Samsung, SK, Hyundai Motor and LG. Other ideas include a joint U.S.-Korea manufacturing fund focused on defense and shipbuilding, and investments in U.S. infrastructure, equipment and energy.

Still, a large gap remains. Washington is demanding more than $400 billion in Korean investment.

“We’ve already done everything we can,” said a public affairs executive at one of Korea’s top conglomerates. “Asking for more means we’ll have to cut domestic investment.”

Meanwhile, despite the cancellation of the “2+2” talks, Ministry of Trade, Industry and Energy Kim Jung-kwan and Trade Minister Yeo Han-koo met with U.S. Commerce Secretary Howard Lutnick in Washington to continue negotiations on Thursday. The Korea-U.S. industry ministers' meeting lasted for 80 minutes, but no visible results have emerged yet.

“We will make every effort to ensure that our companies are not placed at a disadvantage compared to competitor countries,” Kim said. “We will devote all our capabilities to achieve the best outcome from the perspective of maximizing national interest before Aug. 1.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM WON, KIM KI-HWAN [[email protected]]