South Korea's President Lee eager to visit Japan soon
With the two nations commemorating this year the 60th anniversary of diplomatic normalization, Lee also voiced his hope that Tokyo and Seoul will release a new bilateral statement, following the 1998 Japan-South Korea joint declaration, which called on the two East Asian neighbors to build a future-oriented relationship.
Lee, who took office June 4, held his first in-person meeting with Prime Minister Shigeru Ishiba later that month, on the sidelines of the summit of the Group of Seven major countries in Canada, to which the South Korean leader was invited as a guest.
Lee said he himself proposed reviving the shuttle diplomacy with Japan, adding that he intended to visit Japan early but that the Japanese side became busy due to the House of Councilors election scheduled for July 20.
The president expressed hope to promote dialogue with the Japanese side through repeated mutual visits in order to reduce misunderstandings and facilitate cooperation.
Since his inauguration, Lee has engaged in summit diplomacy in earnest, including the participation in the summit among the G7 countries — Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union.
At the news conference, he emphasized his plan of improving ties with China and Russia in what he called practical diplomacy, in addition to advancing cooperation with Japan and the United States.
On U.S. President Donald Trump's high tariff policy, Lee said that his administration will do its best in its negotiations with the U.S. side to draw a mutually beneficial result.
Many South Korean presidents in the past held news conferences about 100 days after taking office.
Lee chose to meet with the press a month after becoming president in the belief that he needs to communicate his administration's policy to the public early as he took office without a transition period following the ouster of his predecessor, Yoon Suk Yeol, over his martial law declaration.
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The Diplomat
5 hours ago
- The Diplomat
Why South Korea Needs a Trade Deal With the United States
Without a new deal or an extension to the talks, South Korea will face a series of new tariffs from the United States that will significantly impact its economy. With the South Korea-U.S. free trade agreement (KORUS FTA) in place, there are virtually no tariffs on trade between the two countries – and there should be no need for a new trade deal. The Trump administration, however, believes that U.S. trade partners have treated the United States unfairly and that new trading arrangements are necessary. Reaching a deal with the Trump administration is complicated by the significant uncertainty the administration has created with its series of tariffs and a shifting approach to negotiations. However, despite these challenges and being in office less than a month, the new Lee Jae-myung administration needs to secure a new trade deal or extension with the United States by July 8 negotiating deadline. Without a new deal or an extension to the talks, South Korea will face a series of new tariffs from the United States that will significantly impact its economy. As one of the world's leading trading nations, South Korea is both directly and indirectly impacted by the new tariffs being implemented by the Trump administration. In the aftermath of the Korean War, the country rebuilt its economy and became one of the world's economic development success stories in part because of international trade. Even today, trade is a key component of the Korean economy. In 2024, exports and imports accounted for 77.6 percent of South Korea's GDP. Exports alone were equivalent to 39.1 percent of GDP. While China remains South Korea's largest trading partner, the margin has been decreasing in recent years. The United States is South Korea's second-largest trading partner and a critical partner for technological cooperation and economic growth. Last year, South Korea exported $128.4 billion in goods to the United States, according to United Nations trade data, only about $4 billion less than it exported to China. Because of the global nature of supply chains, even tariffs that do not directly target South Korea can impact the supply chains of Korean companies either through parts that are produced in third countries for final assembly in the United States or finished goods that are built in third countries for export to the U.S. market. In this context, Korean firms face the impact of the full array of the Trump administration's tariffs including the reciprocal tariffs, sectoral tariffs on steel, automobiles, semiconductors, and other products, as well as tariffs on China and potentially Canada and Mexico. How the Reciprocal Tariffs Impact South Korea In the April 2 executive order announcing the so-called reciprocal tariffs, the White House argued that 'Large and persistent annual U.S. goods trade deficits are caused in substantial part by a lack of reciprocity in our bilateral trade relationships.' In the case of South Korea, the United States has maintained a persistent trade deficit that reached $55.9 billion in 2024. The trade deficit has grown significantly since the implementation of the KORUS FTA and was a point of contention during the first Trump administration. In announcing the reciprocal tariffs, the Trump administration placed a tariff of 25 percent on imports from South Korea. Automobiles, steel, and other products are subject to subject to separate Section 232 national security tariffs; the reciprocal tariffs impact all other trade. They include two parts – a 10 percent universal tariff and a set of country-specific reciprocal tariffs (in South Korea's case, set at 25 percent). While the reciprocal tariff portion is theoretically open to negotiation, under a 90-day 'pause' that expires next week, the universal tariff may be a new baseline under the Trump administration. For the moment, many electronics products such as smartphones and computers will be exempted from the reciprocal tariffs, but those are expected to be covered to some extent by new tariffs once an ongoing Section 232 investigation into semiconductors is finished. According to a study by the Korea International Trade Association, around 50 percent of all Korean exports to the United States are intermediate goods used in production in the United States. These include semiconductors, auto parts, and steel. The high level of Korean exports of intermediate goods to the United States limits the impact of the reciprocal tariffs on South Korea to an extent but also means that the country is more exposed to the sectoral tariffs. When combined with automobile exports, this means that a significant portion of Korean exports will be hit by Section 232 tariffs. However, some significant exports will be subject to the reciprocal tariffs. These include $5.5 billion in exports of petrochemical products, $4.5 billion in plastics, $2.4 billion in optical and related equipment, and nearly $2 billion each in organic chemicals and cosmetics. To give one specific example, global exports of K-beauty products last year surpassed $10 billion for the first time. The United States is the second largest market for K-beauty products. If the full 25 percent tariff remains in place, exports of K-beauty products would likely see a decrease in demand in the United States and producers may need to grow alternative markets such as China and Japan, the number 1 and 3 export destinations for K-beauty. Tariffs on the Automobile Industry Automotive tariffs are the most significant challenge. Exports of automobiles and automotive parts accounted for a third of Korean exports to the United States in 2024. The U.S. is the most important market for the Hyundai Motor Group. Last year, the conglomerate sold 4.1 million vehicles globally; more than 1.6 million of those sales were in the United States, with Hyundai selling 836,802 vehicles and Kia an additional 796,488 vehicles. While the new Metaplant America facility in Georgia will help with U.S. production, slightly more than 50 percent of all vehicles sold by Hyundai Motor Group in the United States are imported. Hyundai Motor Group is not the only automotive producer impacted by the tariffs. GM Korea produces around 500,000 vehicles annually in plants in South Korea, with 90 percent of the production exported to the United States. GM estimates that the tariffs on its Korean production could reduce its overall profit by $2 billion. Without tariff relief, there are concerns in South Korea that the increased costs faced by GM Korea will further a reduction of GM Korea's operations that has been taking place over the last decade. The complete closure of GM Korea is not out of the question. Beyond the impact on Hyundai Motor Group and GM Korea's sales and profits, there will likely be an impact on employment in South Korea, where the automotive industry employs around 335,600 people. If GM Korea were to shutter its facilities completely, it would result in approximately 12,000 job losses. Without an agreement to reduce the Section 232 auto tariffs, imports of Korean autos and auto parts will continue to face a 25 percent tariff – separate from the reciprocal tariffs. The tariff on auto parts was adjusted to provide some relief for parts used to assemble vehicles in the United States, and the steel tariffs will also not apply for imports of steel used in automotive production. Other Section 232 Tariffs: Steel, Semiconductors, and Pharmaceuticals Ordinarily, being subjected to a 50 percent tariff would not be a positive outcome. However, the Trump administration's decision to initially place a 25 percent tariff on all steel imports, later raised to 50 percent, and cancel prior quota agreements on steel did have one silver lining – it eliminated the quota that had been limiting Korean exports to the United States since the first Trump administration. That may be the only positive for South Korea on the steel tariffs. The significant increase in the U.S. tariff on steel comes at an inopportune time for Korean producers. The United States is only the fourth largest export market for Korean steel, but South Korea's domestic steel producers are under pressure from a global glut of steel production, cheap Chinese products, and now the U.S. tariffs. This has forced Korean steel producers to suspend some production and close some facilities. Because the U.S. tariff will not just apply to exports of steel to the United States, but also steel used in large consumer goods such as refrigerators, washers, and dryers, the tariffs are also creating a pressure for exporters of large consumer goods to shift away from Korean steel in production. One estimate by Allianz Research suggests that the tariffs could result in a $600 million loss for Korean steel exports to the United States. Efforts to conclude a deal with the United States are further complicated by additional Section 232 national security cases that the administration is undertaking in areas such as semiconductors and pharmaceuticals. Last year, South Korea exported $10.7 billion worth of semiconductors to the United States. Samsung and SK Hynix account for around 70 percent of global production of DRAM memory chips and are the top two producers of NAND flash memory. The industry is critical to the Korean economy. The $10.7 billion in exports to the United States, however, understates the potential impact of a new semiconductor tariff on South Korea. Both Samsung and SK Hynix have significant production in China, from which they exported an additional $1 billion to the United States. Pharmaceuticals are another area that will be potentially impacted by a Section 232 investigation. South Korea had seen the industry as a potential area of growth and exported $1.4 billion worth of pharmaceuticals to the United States in 2024. Tariffs on Supply Chains in Vietnam, China, and Mexico Because of the nature of global supply chains Korean firms will also face tariffs on goods produced by suppliers or their own firms in other countries. Samsung, for example, produces 60 percent of its smartphones in Vietnam, many of which are then shipped to the United States. Trump announced that Vietnam has agreed to a 20 percent tariff rate; if that eventually includes consumer electronics, Samsung smartphones would face a 20 percent tariff when shipped from Vietnam rather than the current 0 percent tariff. If the White House maintains an exclusion for consumer electronics but places a tariff on the semiconductors inside the smartphone, the origin of the semiconductor will impact the tariff unless South Korea can gain an exemption for any semiconductor produced by a Korean firm regardless of the production facilities' location. The potential semiconductor tariff also could impact production in other ways. Both Samsung and SK Hynix have significant production in China that provides chips to U.S. and foreign firms that assemble consumer electronics in China for export to the United States. Both firms could face pressure to relocate that production as the partners they supply look for ways to avoid tariffs on their final goods. In the automotive sector, the long-term status of the United States-Mexico-Canada Agreement (USMCA) will also be significant. The Trump administration has for the moment suspended tariffs on goods from Canada and Mexico that are compliant with USMCA rules. If that exemption is changed, Korean firms could face tariffs on goods produced in Mexico or Canada for the U.S. market. Korean firms exported 271,000 vehicles from Mexico to the U.S. in 2024, such as the Kia Forte, which is exclusively made in Mexico for the U.S. market. Under normal circumstances, South Korea would be well placed to compete in the U.S. market with the KORUS FTA in place. However, with the Trump administration utilizing national security exemptions to override that agreement, South Korea will need to reach a new understanding on trade to minimize the damage to key sectors such as automobiles and semiconductors. Due to the global nature of supply chains, South Korea will be unable to completely avoid all the new U.S. tariffs, but a new deal that avoids tariffs to the extent possible on goods produced in South Korea is necessary.
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News from Japan Politics Jul 3, 2025 20:06 (JST) Tokyo, July 3 (Jiji Press)--Over 500 people filed their candidacies on Thursday for the July 20 election for Japan's House of Councillors, kicking off their 17-day campaigning for seats in the upper chamber of parliament. Prime Minister Shigeru Ishiba aims to have his ruling coalition maintain its Upper House majority, while opposition parties hope to force the ruling bloc into a minority. The ruling coalition lost its majority in the House of Representatives, the lower parliamentary chamber, in last year's election. One of the major campaign issues in the Upper House race is ways to cushion the impact of higher prices and U.S. President Donald Trump's steep tariffs on Japanese households and businesses. On Thursday, 522 people filed their candidacies for the 125 seats up for grabs in the 248-seat Upper House. They are 350 candidates for 75 prefectural constituency seats and 172 candidates for 50 proportional representation seats. [Copyright The Jiji Press, Ltd.] Jiji Press
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S. Korea Pres. Lee Arranging Early Visit to Japan
News from Japan World Jul 3, 2025 19:48 (JST) Seoul, July 3 (Jiji Press)--South Korean President Lee Jae-myung said Thursday that he is working to arrange an early visit to Japan, hoping to continue the two countries' "shuttle diplomacy," or mutual visits by their leaders. With the two nations commemorating this year the 60th anniversary of diplomatic normalization, Lee also voiced his hope that Tokyo and Seoul will release a new bilateral statement. Like the 1998 Japan-South Korea joint declaration, which called on the two countries to build a future-oriented relationship, the East Asian neighbors need to clearly depict their relations, he added. He made these remarks at a press conference held in Seoul to mark a month since he took office on June 4. Lee held his first in-person meeting with Japanese Prime Minister Shigeru Ishiba later in June, on the sidelines of the summit of the Group of Seven major countries in Canada, to which the South Korean leader was invited as a guest. Lee said that he proposed to Ishiba the continuation of the shuttle diplomacy and that he hopes to reduce misunderstandings between South Korea and Japan, and promote bilateral cooperation through mutual visits and dialogue. [Copyright The Jiji Press, Ltd.] Jiji Press
