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Korea faces crucial week in tariff talks with the U.S.: Can it outdo Japan?

Published: 28 Jul. 2025, 00:02

Chang Se-jeong

The author is an editorial writer of the JoongAng Ilbo.

A critical week has begun for Korea’s trade diplomacy. With the Aug. 1 deadline for a mutual tariff suspension set by the Donald Trump administration approaching, negotiations between Korea and the United States have entered their final phase. Failure to reach a deal could result in a blanket 25 percent tariff on Korean exports on top of existing item-specific duties — raising concerns over a sharp decline in exports and significant economic fallout.

President Lee Jae Myung, center, sits down for a meeting with heads of Korea's largest companies and related economic organizations at the presidential office in Yongsan, Central Seoul, on June 13. From left are LG Group Chairman Koo Kwang-mo, Samsung Electronics Chairman Lee Jae-yong, President Lee, Hyundai Motor Group Executive Chair Euisun Chung and Lotte Group Chairman Shin Dong-bin. [JOINT PRESS CORPS]

As the deadline looms, the mood on each side of the Pacific is starkly different. The Lee Jae Myung administration, just over a month into its term, is on high alert. National Security Adviser Wi Sung-lac returned from Washington without securing a meeting with U.S. Secretary of State Marco Rubio, while Deputy Prime Minister for Economic Affairs Koo Yun-cheol canceled his trip after Treasury Secretary Scott Bessent abruptly pulled out of their planned meeting. These diplomatic snubs have unsettled Seoul, prompting a hasty trade policy meeting on July 25 where the presidential office, for the first time, suggested that agricultural goods could be included in the negotiation agenda.

In contrast, U.S. President Donald Trump appeared unbothered. Over the weekend, he traveled to his mother’s homeland of Scotland and played a relaxed round of golf at his Turnberry resort alongside his son Eric and other family members. On July 27, Trump is scheduled to meet European Commission President Ursula von der Leyen to discuss trade. He then plans to play another round at his Aberdeen golf club before returning to the United States on July 29. Trump has repeatedly warned that unless trade partners such as Korea, the European Union and India reach agreements, steep retaliatory tariffs will go into effect on Aug. 1.

In this high-stakes scenario, Korea finds itself grasping the blade rather than the handle. The pressure has only intensified since Tokyo concluded its own deal with Washington shortly after its upper house elections on July 22. Japan agreed to lower its reciprocal tariffs on U.S.-bound exports from 25 percent to 15 percent. In return, Tokyo offered greater access to its rice and auto markets and pledged $550 billion in investments, including participation in an Alaskan liquefied natural gas project.

Japan’s deal has effectively set a benchmark. Rep. Moon Jin-seok of the Democratic Party noted, “Our goal must be to secure a better deal than Japan.” That expectation places added pressure on the Lee administration to outperform Tokyo. Yet even if Korea succeeds, the nature of the talks — securing lower tariffs in exchange for U.S.-favored concessions — makes it unlikely that the results will be widely celebrated at home.

Still, wisdom and political courage are essential. Beyond negotiating skills, bold decisions may be required. All five countries that have already signed deals with Washington — Britain, Indonesia, Vietnam, the Philippines and Japan — have made concessions in agricultural and livestock markets. Notably, Japan allowed U.S. rice into its highly protected domestic market. For the Lee administration, the question is how much it can concede on rice, particularly given strong opposition from farmers in the North and South Jeolla provinces, a core support base.

Beef poses another dilemma. In 2008, left-leaning groups in Korea fiercely opposed imports of U.S. beef over 30 months of age, spreading unfounded fears about mad cow disease. Today, Trump boasts that Australia, the world’s second-largest beef exporter, has agreed to accept U.S. beef and that "other Countries that refuse our magnificent Beef are ON NOTICE." Unlike rice, which is primarily produced in California — a Democratic stronghold — beef is raised across the United States, giving Trump broader political incentive to push for access.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol leaves Incheon International Airport on July 24. [YONHAP]

Ahead of the Korea-U.S. finance ministers’ meeting on July 31, one message must be clear: Do not let domestic political calculations lead to strategic missteps. Difficult concessions may be unavoidable, but decisions should be made in the interest of the broader national economy. The government must explain the stakes to the public, provide clear mitigation plans for affected sectors and seek understanding through transparency and persuasion.

As Korea marks the 80th anniversary of its liberation, this is an opportunity to shed the historical burdens of pro- and anti-Japan sentiment. A successful negotiation — one that advances national interests beyond the benchmark set by Tokyo — would demonstrate the maturity of Korea’s pragmatic diplomacy.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.