Latest news with #Koo
Korea Herald
21 hours ago
- Business
- Korea Herald
Seoul eyes last-minute breakthrough in US tariff showdown
Trade analysts say Korea must secure firm US commitments before concessions With a looming US tariff deadline threatening Korean exports, top officials from Seoul will head to Washington this week for high-stakes trade talks aimed at averting major blows to autos, steel and other key industries. South Korea and the US are set to hold a "2+2" meeting on trade and finance in Washington on Friday, the first under President Lee Jae Myung's new Cabinet. Deputy Prime Minister and Finance Minister Koo Yun-cheol and Trade Minister Yeo Han-koo will represent Seoul at the table alongside US Treasury Secretary Scott Besant and US Trade Representative Jamieson Greer. With just 10 days left before a potential 25 percent "reciprocal tariff" on Korean goods, a measure pushed by US President Donald Trump, Seoul is seeking to reduce product-specific duties while limiting the impact of non-tariff barriers tied to currency policy, agriculture and digital platform regulations. On Tuesday, Korea's top economic officials convened an emergency strategy session in Seoul to align positions ahead of the Washington talks. 'All relevant ministries have agreed to work as one team, pursuing a thorough and coordinated response with a focus on national interest and pragmatism,' Koo said during a post-meeting briefing. The upcoming tariff talks had initially been expected to include Industry Minister Kim Jung-kwan, but the US requested Seoul to dispatch Yeo, Korea's chief trade negotiator, instead. Foreign Minister Cho Hyun and Industry Minister Kim also plan to travel to the US separately to meet their counterparts, with visits possible as early as this week, according to Koo. Korean exports are already subject to a 10 percent base tariff with additional duties on key products such as cars and steel. Absent progress, the baseline tariff could rise to 25 percent starting in August, compounding pressure on Asia's fourth-largest economy. Beyond tariffs, the US is pressing for concessions on a range of sensitive non-tariff issues. Washington has reportedly called for greater market access for American agricultural and livestock products, easing of Korean regulations on American digital platforms, and approval for the overseas transfer of high-resolution maps with a 1:5,000 scale — a data classification currently restricted for national security reasons. Discussions are expected to include the removal of age limits on US beef imports, an expansion of Korea's rice import quota and potential opening of the market to US apples, according to officials familiar with the matter. In response, Seoul is weighing its own set of trade-offs. The government is reportedly preparing a broader package that includes increased imports of US liquefied natural gas, industrial cooperation in shipbuilding and manufacturing, and potential participation in the Alaska gas pipeline project as part of a reciprocal deal. Trade experts said Seoul should secure firm guarantees from Washington before offering any concessions. 'We need to negotiate properly, but only in a way that ensures clear and binding commitments in return and safeguards against any policy reversals,' said Kim Yang-hee, professor of economics at Daegu University. While Washington is ramping up pressure on dozens of countries ahead of its Aug. 1 tariff deadline, only the UK has finalized a deal so far, she noted. 'Despite its aggressive stance, the US is not in a clearly advantageous position. If it proceeds with imposing all the tariffs as planned, it will face significant headwinds from inflation, rising bond yields and a weakening dollar,' she said. Aligning Korean regulations with international norms could serve as a practical starting point in negotiations, according to Lee Hye-min, former chief negotiator for the Korea-EU FTA and visiting professor at Hankuk University of Foreign Studies. 'Korea could first address issues that fall short of global standards as part of efforts to narrow gaps in the talks,' he said. Easing restrictions on US beef imports could be one such area, though Korean farmers' groups strongly oppose the move. Imports are currently limited to cattle slaughtered at under 30 months — a safeguard introduced after the mad cow disease scare in the early 2000s. US industry groups argue the rule is outdated, pointing out that China, Japan and Taiwan have since relaxed similar bans. While the full economic fallout from tariffs has yet to be felt, Korea's growth is already showing signs of strain. Gross domestic product shrank 0.2 percent in the first quarter from the previous three months and declined 0.1 percent on-year, marking four straight quarters of near-zero growth. Analysts estimate the tariff hike could reduce shipments to the US by 2 to 4 percent and shave up to 0.1 percentage point off Korea's full-year growth.
Korea Herald
a day ago
- Business
- Korea Herald
S. Korea, US to hold '2+2' trade talks in Washington: finance minister
Finance Minister Koo Yun-cheol said Tuesday that he will hold "2+2" high-level trade talks with the United States later this week, ahead of the looming Aug. 1 deadline for bilateral negotiations on the US' sweeping tariff measures. Koo said he and Trade Minister Yeo Han-koo will head to Washington for the talks set to be held Friday, involving US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. "With the Aug. 1 deadline fast approaching, relevant ministries have formed a unified team to respond with a well-coordinated and practical strategy for the national interest," Koo told reporters following a meeting on key economic affairs. When asked about Seoul's negotiation strategy, Koo, who also serves as deputy prime minister for economic affairs, declined to elaborate. The US is set to start imposing 25 percent reciprocal tariffs on South Korean products Aug. 1, in addition to a range of sectoral tariffs, including 25 percent duties on auto and steel imports, that are already in place. "The foreign minister and the industry minister will also travel to the United States as early as this week to meet with their respective counterparts in an effort to persuade Washington," Koo said. The reciprocal tariffs originally took effect on April 9, but Trump paused them the same day for 90 days to allow for negotiations. He later extended the pause, saying the US will start imposing them on Aug. 1. Asked about the possibility of the deadline being further extended, Koo said the government's current focus is on negotiations.
Korea Herald
a day ago
- Business
- Korea Herald
[Editorial] Corporate anxiety
DP pushing 'Yellow Envelope Law'; Corporate tax rates to be raised back Korean companies are concerned that the Lee Jae Myung administration and the ruling Democratic Party of Korea are stepping up legislation that could add to their burdens, following the revision of the Commercial Act. The revised Commercial Act proposed by the party passed the National Assembly on July 3. The revision expands the fiduciary duty of corporate board members to serve the interests not only of their companies but of shareholders as well. Business circles worry that the change could make directors avoid long-term investments because of shareholder objections. Last Friday, Democratic Party lawmakers presented a bill to revise the Labor Union Act — a proposal known as the "Yellow Envelope Law" — to the National Assembly's Environment and Labor Committee, then proceeded to forward it to the subcommittee for deliberation. The party, which has a large majority in parliament, vowed to get the bill passed in an extraordinary session of the Assembly next month. Article 2 of the Labor Union Act revision would require primary contractors to bargain collectively with the employees of subcontractors. Article 3 makes it practically impossible for companies to claim damages from workers taking industrial action. If hundreds or thousands of subcontractor employees were to demand collective bargaining, subcontractors and the large companies that outsource work to them could be mired in incessant labor disputes. The article limiting damage claims against workers could encourage more industrial action. For these reasons, former President Yoon Suk Yeol vetoed the bill twice. The deepening anxiety of companies is understandable. Koo Yun-cheol, the nominee for deputy prime minister and minister of economy and finance, mentioned the decline in corporate tax revenue during his confirmation hearing at the National Assembly last Thursday. He said he would consider restoring the higher corporate tax rates that the Yoon administration lowered. The Moon Jae-in government raised corporate tax rates to a range of 10-25 percent, then the Yoon administration eased them by 1 percentage point to 9-24 percent. Koo blamed the tax cuts for a decrease in corporate tax revenue. He argued that the tax reductions failed to have the desired effects, such as increased investment and economic growth. Corporate tax revenue decreased from 103 trillion won ($74 billion) in 2022 to 80 trillion won in 2023 and 62 trillion won in 2024. Koo is mistaken. Corporate tax revenue did not shrink by 41 trillion won in two years because of tax rate reductions. The biggest factor was the deterioration of business performance, affected by an export slowdown and a semiconductor slump. Unless the economy improves, raising corporate tax rates will not guarantee an increase in tax revenue. Rather, it could reduce tax revenue by dampening corporate investment. If corporate tax revenue diminished because of a weaker economy, common sense says to help businesses attain better results by lowering tax rates. However, Koo says he would do the opposite. The US and European countries offer tax incentives to foster their strategic industries and attract foreign investments. It is questionable whether revising the tax code to increase tax collection can enhance companies' international competitiveness. In his meeting with Korean business leaders last month, President Lee promised to fully support their business activities. Last week, he had separate dinners with Hyundai Motor Group Executive Chairman Chung Eui-sun and LG Chairman Koo Kwang-mo to discuss trade issues. Lee emphasized cooperation between the government and their businesses. But the bill to amend the Labor Union Act is far from a show of support for companies. Lee's economic policy seems to be deviating from the pragmatism that he vowed to champion. If revising the Labor Union Act is inevitable, lawmakers may as well hold further discussions about whether to make it mandatory for primary contractors to bargain collectively with subcontractor employees.
Korea Herald
2 days ago
- Business
- Korea Herald
New finance chief to visit US for urgent tariff talks
Seasoned bureaucrat Koo Yun-cheol was inaugurated as South Korea's Deputy Prime Minister and Finance Minister on Monday, ending a three-month leadership vacuum at the ministry tasked with resolving US tariff talks, accelerating tax reforms and leading an AI-driven economic overhaul. As soon as Koo took office, his first official business trip was scheduled to the US, though the exact schduled was not released as of press time. The trips place at the top of Koo's agenda highlights the urgency and importance Seoul places on trade negotiations on resolving issues like tariffs on automobiles, steel and aluminum, as well as US demands for wider market access. Koo said he would prioritize national interests and pragmatism in the trade talks. 'I will visit the US as soon as possible to explain Korea's situation and work diligently to ensure the best possible outcome in the tariff negotiations,' Koo said, following the inauguration ceremony held at the government complex in Sejong. Koo and Industry Minister Kim Jung-kwan are reportedly coordinating efforts to meet US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer as part of a government-wide push for high-level 2+2 talks. Key negotiating targets include adjustments to the 25 percent tariffs on critical industries and addressing US requests such as easing online platform regulations, exporting high-precision mapping data, expanding LNG imports and boosting industrial cooperation, including in shipbuilding and the Alaska gas pipeline project. Another key issue for Koo is a major tax reform package that is expected to be announced soon. The reforms are anticipated to reverse some of the tax cuts introduced by the previous administration, particularly raising corporate tax rates. The move responds to declining corporate tax revenues, which fell from some 100 trillion won ($71.8 billion) in 2022 to around 60 trillion last year. While corporate taxes have fallen mainly due to an economic slowdown, the reforms are symbolically significant, representing the administration's first major fiscal move. Discussions include scaling back the capital gains tax threshold for major shareholders and restoring some securities transaction taxes, which had been held at near zero rates. Critics argue that existing policies favor ultra-wealthy investors and create excessive tax exemptions, diverging from broader efforts to achieve fiscal equity. The upcoming reforms aim to restore balance, boost revenue, and address long-standing concerns over tax fairness. Koo's advocacy for AI forms a central part of his vision. He has emphasized that the government must prioritize an AI-driven transformation of the economy to escape an outdated growth model and contend with declining potential growth and widening sector disparities. During a confirmation hearing before the National Assembly's Finance and Economy Committee on Thursday, Koo proposed establishing a dedicated AI division within the ministry. He stressed that AI efforts should concentrate on areas where regions and industries have competitive advantages. 'It's not about applying AI across all industries but honing in on the items that can excel. To do that, we need to eliminate regulations and consider injecting unlimited funds,' he said.
West Australian
2 days ago
- Politics
- West Australian
North Korea tours mooted as South looks to mend ties
South Korea is studying various plans to improve relations with North Korea, a spokesperson said in response to a media report that Seoul is considering allowing individual tours to North Korea. Koo Byung-sam, a spokesperson for South Korea's Unification Ministry, which handles inter-Korea affairs, refused to comment on a "particular issue". But Koo said he understood individual tours were not in violation of international sanctions. Tourism is one of a narrow range of cash sources for North Korea that are not targeted under United Nations sanctions over its nuclear and weapons programs. South Korean President Lee Jae Myung has pledged to improve strained relations with Pyongyang that have reached their worst level in years. In a bid to ease tensions, Lee suspended anti-North Korea loudspeaker broadcasts along the border and ordered a halt to leaflet campaigns criticising the North's leaders by anti-Pyongyang activists. The president has said he will discuss further plans with top security officials to resume dialogue with North Korea, which is technically at war with the South. North Korea recently opened a beach resort in the city of Wonsan, a flagship project driven by leader Kim Jong-un to promote tourism. But the tourist area is temporarily not accepting foreign visitors, according to a July 16 note by DPR Korea Tour, a website operated by North Korea's National Tourism Administration. North Korea first needs to open the area to the outside world, the Unification Ministry spokesperson said, when asked if South Koreans could travel to Wonsan. South Korea once ran tours to North Korea's Mount Kumgang area, but suspended them in 2008, when a South Korean tourist was shot dead by a North Korean soldier.
