S Korea Signals Resistance, Likely Delays for Trump Tariffs
By Reuters | 16 May, 2025

S Korea has issues with Trump's proposed tariffs and piggybacked demands, and has cards of its own, including US need for Korean help in reviving US shipbuilding capacity.

South Korea's Minister of Trade and Industry Ahn Duk-geun said on Friday that Seoul would try to reach a deal with Washington on tariffs by the July deadline previously agreed, but warned that the target could be missed due to domestic politics.

The countries will hold technical consultations next week to proceed with tariff negotiations and expect to have another ministerial meeting in June, Ahn said, after meeting with U.S. Trade Representative Jamieson Greer.

Seoul and Washington had said they would aim to craft a trade package on tariffs and economic cooperation by July 8.

"We will do our best to meet the timeline but we expect that it may be adjusted a little in case it is unavoidable," he told reporters.

The meeting between Ahn and Greer was held on the sidelines of a gathering of trade ministers from 21 member economies of the Asia-Pacific Economic Cooperation (APEC) grouping in South Korea.

After U.S. President Donald Trump slapped 25% tariffs on South Korea in April, Seoul was one of the first countries to hold face-to-face talks with Washington, soon after Japan.

However, South Korea's political turmoil in the wake of a shock martial law order raised questions over the progress of trade talks. South Korea's Prime Minister Han Duck-soo, who had been leading negotiations, resigned, followed by Finance Minister Choi Sang-mok stepping down.

Currently, South Korea's interim leader is the education minister until a new president is elected on June 3.

Ahn said his U.S. counterparts fully understood the risk of delays due to the election, while reiterating South Korea's call for a waiver from the tariffs.

The technical discussions next week are due to focus on balanced trade and non-tariff barriers among other issues, according to the trade ministry.

The package deal negotiated is expected to encompass four main areas: tariffs and non-tariff measures, economic security, investment cooperation, and currency policy.  In particular, S. Korea has the world's largest shipbuilding capacity behind China's, while the US has very little viable capacity.  As an ally S Korea is the nation best situated to provide the US with the capacity to produce and repair US navy ships as well as to help rebuild US domestic shipbuilding capacity.  This gives strong leverage for S. Korea in tariff negotiations.

While touting cooperation in shipbuilding as an important card for negotiations, South Korea has denied that defence costs for some 28,500 U.S. troops stationed in the country will be included.

Ahn said a request by Alphabet's Google to the South Korean government on the transfer of local map data overseas could be part of the broad tariff negotiations.

U.S. Commerce Secretary Howard Lutnick said he did not expect "fast deals" with the two Asian allies Japan and South Korea in an interview with Bloomberg News last week.

"Washington is prepared to move forward in the interim talks, given the range of interests that could be addressed in a potential negotiated agreement," said Jay Truesdale, a former U.S. diplomat and CEO of TD International, a risk intelligence firm.

"The braking mechanism might be more on the South Korean side, given pre-election jockeying and the need for consultation between Korean business and political stakeholders," Truesdale said.

South Korea's central bank said last month downside risks to this year's economic growth forecast of 1.5% had increased significantly due to U.S. tariffs.

(Reporting by Jihoon Lee, Ju-min Park; Editing by Ed Davies; Editing and analysis by Goldsea staff.)