The United States Trade Representative (USTR) has raised the possibility of changes to the Korea-U.S. Free Trade Agreement (FTA) while advising on the 'modernization' of existing trade agreements.
On the 6th, according to the White House, the USTR stated in a summary of its report on 'America First trade policy' submitted to the Donald Trump administration that "there is considerable room for amending existing trade agreements to align with American interests."
The USTR has presented specific modernization areas including ▲ tariff reductions for U.S. exporters ▲ enhancement of transparency in foreign regulations ▲ expansion of agricultural market access ▲ strengthening of origin rules. While it did not specify the Korea-U.S. FTA, the inclusion of South Korea in the reciprocal tariff targets announced by the U.S. on the 3rd has raised concerns within the South Korean government about the possibility of renegotiation pressures from the Trump administration.
The Ministry of Trade, Industry and Energy has not yet received any official proposals or mentions related to the FTA from the United States. Deputy Trade Minister Park Jong-won noted in a meeting with reporters on the 3rd that "the U.S. has never directly said that the Korea-U.S. FTA needs to be renegotiated" and that "it seems premature to discuss moving to the level of renegotiation of the Korea-U.S. FTA."
The government sees the immediate alleviation of the 25% reciprocal tariff burden as a top priority and is focused on preparing countermeasures, including the visit of Chief Trade Negotiator Jeong In-kyo to the U.S. At the same time, the government maintains that "the Korea-U.S. FTA is still valid." This is because, as the structure of reciprocal tariffs is added to existing tariffs, South Korea, as a signatory country of the FTA, is subject to a lower effective tax rate than non-signatory countries.
In fact, South Korean cars can be exported duty-free due to the Korea-U.S. FTA. In contrast, in countries without an FTA, existing tariffs of 2.5% are combined with reciprocal tariffs, reaching 27.5%. Machine tools and other products also benefit from relatively low tariff rates thanks to the FTA.
If the amendment of the FTA becomes a reality in the future, there is a prospect that it will take the form of limited measures such as side letters or the insertion of new provisions, rather than comprehensive renegotiation. Since both countries already apply duty-free status to most manufactured products, the range of amendments that the U.S. can request is relatively narrow.
Meanwhile, in the '2025 National Trade Barriers Report (NTE)' released by the USTR on the 1st, issues related to digital trade, government procurement, and agricultural markets were noted as needing improvement regarding South Korea.
Trade experts are weighing the possibility of negotiations focusing on these areas during the Trump administration. However, there are analyses suggesting that, given the obligation to concurrently negotiate trade agreements with key countries like the European Union (EU), China, and Canada, the renegotiation of the Korea-U.S. FTA may not be an immediate priority.