South Korea is trying to secure a mutual trade package with President Donald Trump before August 1, when U.S. tariffs on Korean exports are set to snap back to 25%.
The presidential office in Seoul said on Saturday that officials are preparing a deal they hope both countries can agree on ahead of minister-level meetings next week.
This effort comes as the Trump administration wraps up trade talks with Japan and the Philippines, and sets its sights on China and the EU next.
According to Reuters, the new trade package will include shipbuilding cooperation, which has become a key talking point between U.S. and South Korean officials. U.S. Commerce Secretary Howard Lutnick raised the issue on Friday during talks with Industry Minister Kim Jung-kwan.
Their meeting followed one held on Thursday, where both Lutnick and Kim agreed to reach a trade deal by the deadline. A larger joint meeting with finance and trade chiefs had been scheduled for Friday but was postponed without a new date.
Talks intensify as South Korea tries to avoid steep U.S. tariffs
South Korea’s delegation is under pressure. Officials want a deal that isn’t worse than what Japan got earlier this week. Tokyo secured a 15% tariff cap, and Seoul is aiming for something at least as good.
National Security Adviser Wi Sung-lac recently flew to the U.S. for direct talks, and Trade Minister Yeo Han-koo is also on the ground. The urgency is clear. If talks collapse, South Korea’s exports to the U.S. will face the full 25% tariff starting next Thursday.
Negotiations so far have covered non-tariff barriers, especially in agriculture and digital services, though officials say foreign exchange hasn’t been seriously included in the talks.
While Trump’s team juggles multiple negotiations, South Korea is still trying to get its deal over the finish line. Two more key meetings are lined up for next week: Finance Minister Koo Yun-cheol will meet Treasury Secretary Scott Bessent, and Foreign Minister Cho Hyun will speak with Secretary of State Marco Rubio.
Back home, South Korea’s economic performance is giving negotiators a little breathing room—but not much. Preliminary data shows the economy grew 0.6% in the last quarter, beating the 0.5% estimate from Reuters. That’s also a rebound from the 0.2% drop recorded in the first quarter. Over the year, the GDP rose 0.5%, better than the 0.4% many expected.
South Korean exports carry growth as AI, semiconductors keep moving
Growth came from exports. The Bank of Korea reported that exports of both goods and services rose 4.2% quarter over quarter, helped by semiconductors, petroleum, and chemical products.
“Net exports were the principal driver of growth,” said Louise Loo, who leads Asia economics at Oxford Economics. She said companies had been pushing out shipments ahead of expected changes to U.S. trade rules, including tariffs.
But it’s not all smooth. Shivaan Tandon, a markets economist at Capital Economics, said that while demand for chips and AI tech might help, South Korea’s other exports could struggle if global trade slows further. He warned that sectors not tied to AI might soon feel the squeeze if tariffs go back into effect.
Trade matters for South Korea’s economy, since as of December 2024, exports made up 44% of GDP, with the U.S. ranked as the second-largest export destination, based on World Bank data.
But there are limits to what Seoul is willing to offer. On Thursday, Reuters reported that the finance ministry canceled a planned meeting with Bessent due to scheduling issues. Still, both sides said they’d try to meet “as soon as possible.”
In the meantime, Yonhap News said South Korean officials have ruled out any changes to beef and rice imports as part of the negotiation. Those topics are seen as politically sensitive, and Seoul isn’t using them as trade-offs.
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