US delays crucial ‘2+2' trade meeting with Korea

Korea Herald

3 days ago

Seoul weighs $100 billion US investment from top chaebol groups to avert looming tariffs
A high-level trade meeting between South Korea and the US was abruptly called off Thursday, just one day before it was set to take place in Washington, due to US Treasury Secretary Scott Bessent's "urgent schedule."
The delay has sparked concerns in Seoul as next week's tariff deadline approaches with insufficient time for a potential breakthrough.
South Korea's Deputy Prime Minister and Finance Minister Koo Yoon-cheol was set to depart for Washington when the US notified Seoul of the last-minute decision. Koo canceled the trip after receiving the notice while waiting at Incheon International Airport, just an hour before his scheduled flight.
The now-delayed '2+2" dialogue was to take place between Koo and Trade Minister Yeo Han-koo from Korea, as well as Bessent and US Trade Representative Jamieson Greer from the US. It would have marked the first such meeting under President Lee Jae Myung's new Cabinet.
The high-stakes talks were seen in Seoul as a critical opportunity to make a breakthrough in trade talks before the Aug. 1 deadline, when a 25 percent 'reciprocal tariff' will be imposed on all Korean goods unless a new deal is reached.
"Washington has apologized multiple times for postponing the meeting and proposed rescheduling the meeting between Bessent and Koo as soon as possible," Seoul's Finance Ministry said.
While the US did not clarify the nature of Bessent's scheduling conflict, reports say he may accompany US President Donald Trump's trip to Scotland on July 25-29.
This means it could be virtually impossible to reschedule the '2+2' meeting before the tariff deadline, further dimming hopes of a negotiated resolution in time.
Despite the disruption, Yeo and Industry Minister Kim Jung-kwan, who are already in Washington, will continue consultations with their US counterparts, including Greer, Secretary of Commerce Howard Lutnick and Secretary of Interior Doug Burgum, according to the Industry Ministry.
South Korea has been pushing for reduced tariff rates or exemptions through a comprehensive deal covering both tariffs and broader economic cooperation. Korean exports currently face a 10 percent base tariff with additional levies imposed on key products, such as 25 percent tariffs on automobiles and auto parts, and 50 percent on steel and aluminum. Without a meaningful advancement in negotiations, this baseline tariff is scheduled to increase to 25 percent on Aug. 1, intensifying economic strain on the export-dependent country.
Further adding to the pressure, Japan struck a deal with the US on Wednesday. The latter agreed to lower its tariff rate against Japan from 25 percent to 15 percent in exchange for a whopping $550 billion investment in the US and a difficult concession to open its market for more American automobiles and rice.
Observers say Japan's deal could serve as a benchmark for South Korea in its own negotiations, as the two countries share similar trade dynamics with the US: both run comparable trade deficits and rely heavily on the US market for key exports, such as automobiles, semiconductors and electronics.
Like Japan, South Korea is considering an investment package exceeding $100 billion with participation from the country's major conglomerates, including Samsung, SK, Hyundai Motor and LG, according to industry sources. The figure is expected to grow as additional corporate and government contributions are finalized. Seoul had planned to propose a $100 billion package during the now-postponed talks.
President Lee was scheduled to meet with Samsung Electronics Chair Lee Jae-yong on Thursday afternoon, according to local media reports, with discussions expected to focus on the US investment and tariffs. Lee has held similar one-on-one meetings since last week, seeing Hyundai Motor Chair Chung Euisun on July 14, LG Group Chair Koo Kwang-mo on July 15, Hanwha Group Vice Chair Kim Dong-kwan on Tuesday and SK Group Chair Chey Tae-won on Wednesday.
Meanwhile, National Security Adviser Wi Sung-lac sought to dispel speculation that he was unable to have a face-to-face meeting with US Secretary of State Marco Rubio during his visit to Washington. Wi explained that Rubio was urgently summoned by Trump, and was unable to meet as the meeting ran longer than expected.
Wi said that "sufficient coordination had taken place via phone call" with Rubio, and that they had agreed to have an additional consultation, with the specific time and method to be arranged through working-level coordination.
"The report that the US side refused the meeting, resulting in the cancellation of the talks, is inaccurate. Such misinformation not only undermines the reputations of the individuals involved, including Wi and Rubio, but could also negatively impact the trust between Korea and the US in the middle of sensitive communication," Wi said in a written statement.