Latest news with #KoreaFreeTradeAgreement
Yahoo
24-04-2025
- Business
- Yahoo
Factbox-What's on the table for US-South Korea trade talks?
SEOUL (Reuters) - When a South Korean delegation meets U.S. counterparts in Washington on Thursday for trade talks, they face a wide range of potential agenda items. U.S. President Donald Trump has said he wants to hold "one-stop shopping" negotiations and has mentioned the trade balance, tariffs, shipbuilding, energy cooperation, and military cost sharing as issues for discussion. Here are some of the key issues that may be discussed during the South Korea-U.S. trade talks. TARIFFS South Korea faces looming reciprocal tariffs, which Trump set at 25%, as well as item-specific tariffs on products such as steel, autos and semiconductors. It will likely seek to lower the reciprocal tariff rate to the baseline 10%, but may struggle to win exemptions from the item-specific levies. The U.S.-Korea Free Trade Agreement has reduced bilateral tariffs to 0.79% in 2024, but Washington could ask Seoul to lower remaining tariffs on some U.S. agricultural goods such as rice and fruit. Trump could also target some non-tariff barriers such as South Korean restrictions on genetically modified foods, quarantines for agriculture products, limits on beef, and regulations on tech companies. INVESTMENT South Korea could offer to expand production bases in the United States via Korean companies, including in the automotive, chip and battery sectors. On March 24, Hyundai announced a $20 billion investment for U.S.-based auto and auto parts production through 2028. The potential tariffs will likely boost back-end fabrication investment in the United States, according to Citi's semiconductor equity research team. PURCHASES Trump and the U.S. acting ambassador to Seoul, Joseph Yun, have warned that South Korea must reduce its trade surplus with the United States. South Korea is a major buyer of American military exports, including warplanes, and could look to announce more deals. It could also boost purchases of U.S.-produced energy commodities, agricultural products, and commercial airplanes. In March Boeing and Korean Air touted an upcoming $32.7 billion order for up to 50 widebody airplanes, plus engines and maintenance. ENERGY Trump wants South Korea and other Asian partners to join a $44 billion natural gas export project in Alaska. The project aims to transport gas south from Alaska's remote north via a 1,300-km (800-mile) pipeline, to be shipped as LNG to Japan, South Korea and Taiwan, bypassing the Panama Canal. South Korea hosted the Alaska governor and energy officials for talks in March and officials are considering travelling soon to Alaska as part of working-level negotiations on the project. SHIPBUILDING South Korea has said cooperation with Washington in the shipbuilding sector is a "very important card" in negotiations. The country's shipyards are expected to potentially benefit from rising demand for tankers, particularly after Trump restricted use of Chinese vessels. South Korea also has contracts for servicing some U.S. Navy ships. Some experts have expressed scepticism, however, that South Korea has the capacity to capitalise on increasing orders. DEFENCE COSTS South Korea hosts about 28,500 American troops as a legacy of the 1950-1953 Korean War. It relies on the U.S. nuclear umbrella for protection against China, Russia and North Korea, and is seen as a key ally for projecting U.S. military power. Late last year Seoul signed a new agreement under which it will pay around $1.2 billion toward the upkeep of those U.S. troops in 2026, up 8.3% from 2025. During the campaign Trump said South Korea should pay as much as $10 billion per year, and has said such costs would be part of the negotiations.
Reuters
24-04-2025
- Business
- Reuters
South Korea to target lower tariffs in opening round of US trade talks
SEOUL, April 24 (Reuters) - A South Korean delegation will meet U.S. counterparts on Thursday for an opening round of trade talks, with cooperation on shipbuilding and energy expected to be on the agenda, and possibly shared defence costs, as Seoul seeks lower tariffs. South Korea, which faces 25% U.S. reciprocal tariffs, is among the first countries the Trump administration has initiated trade talks with, after its first face-to-face discussions last week with Japan, another key Asian ally slapped with 24% tariffs. "I think this is only going to be the opening salvo of negotiations," said Tom Ramage, Washington-based economic policy analyst at the Korea Economic Institute of America (KEI). Given how Seoul is competing with other countries and faces a 90-day timeframe before a tariff pause is due to end, he said talks were likely to be extended, and may even result in some form of renegotiated U.S.-Korea Free Trade Agreement. South Korea, a key U.S. ally, has often been singled out by Trump for its trade surpluses with the United States, which hit a record high of $55.6 billion in 2024, up 25% from 2023 and nearly five times higher than in 2019. Finance Minister Choi Sang-mok and Industry Minister Ahn Duk-geun are due to meet with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in Washington, D.C. at 8 a.m. (1200 GMT), on the sidelines of an International Monetary Fund and World Bank Group gathering. The meeting was arranged at the request of the United States, Seoul said, and comes after U.S. President Donald Trump and South Korea's Acting President Han Duck-soo discussed shipbuilding, energy purchases, an Alaskan gas project and defence payments in a phone call on April 8. "The government will do its best to find a 'win-win' between the two countries, with focus on three areas of trade balance, shipbuilding and LNG, under the principle that the national interest is the foremost priority," Han said on Thursday. Since the call, South Korean officials have touted shipbuilding as a "very important card" it holds. South Korea is the world's second-largest shipbuilder after China, and Trump has specifically called for cooperation in the sector since returning to power. At the same time, Seoul has taken a more cautious stance on the Alaskan gas project, saying participation could be part of a negotiation package, while noting questions about its profitability. South Korea's auto sector is seen as particularly vulnerable to tariffs, as the country's car sales to the United States account for 49% of its total auto exports. The U.S. has already applied 25% tariffs on autos, prompting Seoul to announce emergency support measures to help major exporting companies such as Hyundai Motor and Kia. On the issue of payments for the 28,500 U.S. troops South Korea hosts, Ahn said on Wednesday Seoul was prepared if the issue was brought up, but Foreign Minister Cho Tae-yul told lawmakers later it would not be considered for a package deal and should be dealt with separately. In preparation for discussions on non-tariff barriers, Seoul's delegation will include officials from eight different ministries: finance, trade, foreign affairs, technology, transport, environment, agriculture and health. South Korea is among three Asia-Pacific countries that have a comprehensive trade pact with the United States, eliminating nearly all tariffs between the two countries. It was first signed in 2007 but revised in 2018 during Trump's first term after he said the initial agreement was a "horrible deal". ACTING LEADERSHIP The trade talks come as South Korea remains embroiled in its worst political crisis in decades. A snap presidential election will be held on June 3, after former President Yoon Suk Yeol was impeached and removed from office this month over his failed declaration of martial law. "We basically expect concrete progress on the negotiations between the Korean and the U.S. government to come out only after the snap presidential election," said Oh Suk-tae, an economist at Societe Generale. Oh said it would be especially difficult for South Korea to make any firm commitment on energy projects and defence costs under an acting president. Han has, however, in interviews this month expressed willingness to reach a deal, saying the country will not fight back against Washington as it owes the U.S. for its recovery from the 1950-1953 Korean War. He has also not ruled himself out of contesting the election. "Should acting president Han Duck-soo appear to successfully negotiate tariff waivers for South Korea, particularly for its auto exports, he would increasingly position himself as a presidential candidate," said economists at S&P Global Market Intelligence. See separate FACTBOX on the trade talks.
Reuters
24-04-2025
- Business
- Reuters
What's on the table for US-South Korea trade talks?
SEOUL, April 24 (Reuters) - When a South Korean delegation meets U.S. counterparts in Washington on Thursday for trade talks, they face a wide range of potential agenda items. U.S. President Donald Trump has said he wants to hold "one-stop shopping" negotiations and has mentioned the trade balance, tariffs, shipbuilding, energy cooperation, and military cost sharing as issues for discussion. Here are some of the key issues that may be discussed during the South Korea-U.S. trade talks. TARIFFS South Korea faces looming reciprocal tariffs, which Trump set at 25%, as well as item-specific tariffs on products such as steel, autos and semiconductors. It will likely seek to lower the reciprocal tariff rate to the baseline 10%, but may struggle to win exemptions from the item-specific levies. The U.S.-Korea Free Trade Agreement has reduced bilateral tariffs to 0.79% in 2024, but Washington could ask Seoul to lower remaining tariffs on some U.S. agricultural goods such as rice and fruit. Trump could also target some non-tariff barriers such as South Korean restrictions on genetically modified foods, quarantines for agriculture products, limits on beef, and regulations on tech companies. INVESTMENT South Korea could offer to expand production bases in the United States via Korean companies, including in the automotive, chip and battery sectors. On March 24, Hyundai announced a $20 billion investment for U.S.-based auto and auto parts production through 2028. The potential tariffs will likely boost back-end fabrication investment in the United States, according to Citi's semiconductor equity research team. PURCHASES Trump and the U.S. acting ambassador to Seoul, Joseph Yun, have warned that South Korea must reduce its trade surplus with the United States. South Korea is a major buyer of American military exports, including warplanes, and could look to announce more deals. It could also boost purchases of U.S.-produced energy commodities, agricultural products, and commercial airplanes. In March Boeing and Korean Air touted an upcoming $32.7 billion order for up to 50 widebody airplanes, plus engines and maintenance. ENERGY Trump wants South Korea and other Asian partners to join a $44 billion natural gas export project in Alaska. The project aims to transport gas south from Alaska's remote north via a 1,300-km (800-mile) pipeline, to be shipped as LNG to Japan, South Korea and Taiwan, bypassing the Panama Canal. South Korea hosted the Alaska governor and energy officials for talks in March and officials are considering travelling soon to Alaska as part of working-level negotiations on the project. SHIPBUILDING South Korea has said cooperation with Washington in the shipbuilding sector is a "very important card" in negotiations. The country's shipyards are expected to potentially benefit from rising demand for tankers, particularly after Trump restricted use of Chinese vessels. South Korea also has contracts for servicing some U.S. Navy ships. Some experts have expressed scepticism, however, that South Korea has the capacity to capitalise on increasing orders. DEFENCE COSTS South Korea hosts about 28,500 American troops as a legacy of the 1950-1953 Korean War. It relies on the U.S. nuclear umbrella for protection against China, Russia and North Korea, and is seen as a key ally for projecting U.S. military power. Late last year Seoul signed a new agreement under which it will pay around $1.2 billion toward the upkeep of those U.S. troops in 2026, up 8.3% from 2025. During the campaign Trump said South Korea should pay as much as $10 billion per year, and has said such costs would be part of the negotiations.
Korea Herald
08-04-2025
- Business
- Korea Herald
AmCham releases business insight report amid tariff uncertainty
The American Chamber of Commerce in Korea announced Tuesday the release of its 2025 Business Environment Insight Report: APEC Special Edition, offering an in-depth analysis of Korea's regulatory landscape for US businesses. The report comes amid growing uncertainty in the bilateral trade environment, following the Trump administration's recent proposal of a 25 percent tariff on South Korean imports. In this context, AmCham emphasized the urgent need for Korea to enhance regulatory transparency, reduce duplicative policies and align with global standards. Released in anticipation of the 2025 APEC Economic Leaders' Week in Korea later this year, the report outlines key policy recommendations across 12 major sectors, including digital economy, energy and pharmaceuticals. It identifies around 70 unresolved or newly emerging regulatory issues impacting US companies. 'As challenges rise with the announcement of new tariffs, our confidence in the strength of the bilateral economic partnership remains unchanged,' said AmCham Chair and CEO James Kim. 'This report serves as a practical roadmap for improving market access and strengthening Korea's position as a competitive and reliable destination for global business.' The report also highlights the positive impact of the Korea Free Trade Agreement, which has significantly expanded bilateral trade. AmCham said it aims to work closely with both governments to foster sustainable growth and shared prosperity in the Asia-Pacific region.
