South Korea Feels The Heat After Japan Inks Trump Trade Deal — Officials In DC To Salvage Terms Before August Deadline

South Korea is under pressure after Japan struck a trade deal with the U.S., with the new Industry Minister Kim Jung-kwan reportedly heading to Washington to resolve the trade issue.

South Korean News Agency Yonhap reported that the Trade, Industry and Energy Minister, who is on a three-day visit to the U.S., will meet with U.S. Commerce Secretary Howard Lutnick, Energy Secretary Chris Wright, and Interior Secretary Doug Burgum. 

His visit comes a week ahead of the Aug. 1 deadline issued by the U.S. 

U.S. President Donald Trump communicated a 25% tariff for South Korea in a letter sent to President Lee Jae-myung in early July, unchanged from the “Liberation Day” rate.

The South Korean Kospi, a key stock market gauge, languished below the unchanged line for the better part of Wednesday’s session before recovering in late trading.

While the SPDR S&P 500 ETF (SPY) has gained nearly 8% this year, the iShares MSCI South Korea ETF (EWY) has surged up over 43%.

“Given the significant impact that tariff negotiations could have on our economy, the government will thoroughly respond by carefully considering the sensitivities across different sectors," the South Korean minister reportedly said.

"We will make every effort to ensure that this negotiation becomes an opportunity to upgrade the Korea-U.S. cooperation in the industrial and energy sectors, producing a positive-sum outcome for both countries."

Commenting on the development, Kim Sung-rae, an analyst at Hanwha Investment & Securities, said, “Investors see the Japan-U.S. deal as a benchmark for the Korean deal,” Reuters reported.

"The deal would put pressure on Korean negotiators to come up with a similar, or better, deal." The Japan trade deal announced by the U.S. lowered the levy on imports from Japan to 15%, down from the previously announced 25% rate by Trump.

Kim Yong-jin, a management professor at Sogang University, reportedly said, “It will be difficult for South Korea to have U.S. tariff rates lower than 15% on Japan and 10% on Britain.”

Yonhap reported that South Korea will likely discuss its ban on American beef from cattle 30 months old or older, proposed online platform regulations, and restrictions on the export of high-precision map data. 

The report stated that “2+2” talks involving South Korea's Finance Minister Koo Yun-cheol and Trade Minister Yeo Han-koo, along with their U.S. counterparts, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, are scheduled for Friday.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: Japan PM Shigeru Ishiba Reportedly Mulls Stepping Down This Month After Striking US Trade Deal

Share

·

Add us on