U.S. tariffs evasion contemplated through South Korean's proposed comprehensive agreement
Rewritten Article:
WSJ Seoullina - South Korea is on the hunt for a deal with the USA to dodge President Trump's hefty tariffs, according to South Korea's finance minister, who spoke up about it on Friday. This potential deal, known as a "July Package," could pave the way for a trade agreement by next week, Treasury Secretary Scott Bessent mentioned.
With South Korea exporting significantly to the US, companies like Samsung Electronics and Hyundai autos could take a massive hit if Trump sticks to his guns and implements a 25% "reciprocal" tariff.
South Korea's finance minister, Choi Sang-mok, and trade minister, Ahn Duk-geun, have been holding discussions with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Washington. According to the trade ministry, these chats covered U.S. tariff policies.
The "July Package" proposed by South Korea intends to abolish tariffs, a move that would be made before Trump's 90-day suspension on "reciprocal" tariffs expires on July 8.
"We explained that the imposition of reciprocal and product-specific tariffs by the United States could negatively impact bilateral economic cooperation," Choi said at a press conference in Washington. He also stated that South Korea wants exemptions and waivers for tariffs imposed on its exports.
Choi mentioned that they plan to continue talks with Greer, who will visit Seoul for the APEC Trade Ministers' Meeting on May 15 and 16.
The two countries have apparently reached a "principled agreement" on establishing a framework for future consultations, as per trade minister Anh.
Bessent, on the other hand, reported an incredibly successful meeting with the South Korean government and suggested that things might be progressing quicker than expected: "We will be talking technical terms as early as next week as we aim for an agreement and understanding as soon as next week," Bessent told reporters.
South Korea's economic woes took a turn for the worse in the first quarter of this year, with the country's economy sadly contracting 0.1% due to tariff concerns and political tumult following a martial law declaration, as revealed by the country's central bank on Thursday.
Enrichment Insights:
- The proposed "July Package" aims to eliminate US tariffs on South Korean goods before July 8, 2025.
- The agreement focuses on four major areas: tariffs and non-tariff barriers, economic security, investment cooperation, and currency policy.
- South Korea has suggested cooperation in shipbuilding and energy sectors as part of the negotiations.
- The deal could help balance the trade imbalance between South Korea and the US, promoting fairer trade practices.
- Positive market reactions have already occurred, with shares of major South Korean companies reporting significant gains following the announcement.
- The agreement indicates the strategic importance of the US-South Korea alliance, demonstrating efforts to balance economic and security interests.
- Successful negotiations could set a precedent for other countries facing similar tariff disputes, showcasing the effectiveness of collaborative trade negotiations in addressing global trade tensions.
- South Korea's finance minister, Choi Sang-mok, stated at a press conference in Washington that the implementation of reciprocal and product-specific tariffs by the United States could negatively impact bilateral economic cooperation.
- The "July Package" proposed by South Korea intends to abolish tariffs before President Trump's 90-day suspension on "reciprocal" tariffs expires on July 8.
- South Korea wants exemptions and waivers for tariffs imposed on its exports, as mentioned by Choi Sang-mok.
- Trade Representative Jamieson Greer will visit Seoul for the APEC Trade Ministers' Meeting on May 15 and 16, continuing talks with South Korea's finance minister, Choi Sang-mok, as part of the ongoing negotiations.
- According to Treasury Secretary Scott Bessent, things might be progressing quicker than expected, with technical discussions to occur as early as next week, aiming for an agreement and understanding as soon as possible.
