South Korea and the United States agreed on the 24th (local time) to pursue a "package agreement" that includes the elimination of tariffs and industrial cooperation between the two countries before the expiration of the reciprocal tariff suspension (July 8).
The two countries reached this agreement during a "2+2 trade consultation" attended by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, Minister of Trade, Industry and Energy Ahn Duk-geun, Treasury Secretary Scott Bansen, and United States Trade Representative (USTR) Jamison Grier in Washington, D.C.
Deputy Prime Minister Choi noted during a briefing at the South Korean Embassy in the U.S. that "we agreed to prepare a "July Package" aimed at eliminating tariffs before the expiration of the reciprocal tariff suspension on July 8, and that a consensus was formed to discuss four areas of mutual interest: tariffs and non-tariff measures, economic security, investment cooperation, and currency policy."
Minister Ahn stated, "We decided to conduct practical consultations between the two countries next week, with a goal of achieving the "July Package" by July 8, and discussions on the fields and methods for future consultations will be determined through meetings of the Economic Security Strategy Task Force chaired by the Prime Minister and relevant ministries after my return."
Our delegation actively requested a waiver of tariffs on South Korea during the consultations. Deputy Prime Minister Choi stated, "We conveyed our position that a waiver and exceptions for the tariffs imposed on South Korea are necessary," and "in particular, we focused on explaining the automotive sector, which has the most negative effects on our economy."
In response to our request, Minister Ahn reported that the USTR indicated they would "handle it well" regarding the waiver for automotive tariffs. Ahn noted, "The U.S. side also understands the issues related to automobiles well," adding that "toward the end of the meeting, we discussed tackling those issues (automotive tariff items), and in bilateral consultations with the USTR, they said, "We understand your position, and let’s discuss it.""
President Donald Trump emphasizes the need for swift discussions regarding tariff negotiations, but the talks between South Korea and the U.S. have been decided to proceed "in a calm and orderly manner without rushing, taking into account the political situation in Korea, where a presidential election is scheduled for June 3," according to Deputy Prime Minister Choi. In this regard, Choi explained, "There are various considerations for future consultations, such as Korea’s political schedule, trade-related laws, and the need for cooperation with the National Assembly, and we requested the U.S. side’s understanding on these matters."
Accordingly, the agreement on the "July Package" that includes the elimination of tariffs and industrial cooperation between South Korea and the U.S. is expected to be concluded between the new government that will be formed after the June 3 elections and the Trump administration.
The two countries agreed to continue practical consultations and high-level meetings, starting from this consultation. Initially, practical consultations between the Ministry of Trade, Industry and Energy and the USTR are scheduled to begin next week. High-level consultations with USTR representative Jamison Grier, who will attend the APEC trade ministers' meeting in Jeju on the 15th of next month, are also planned.
The two countries agreed to discuss currency policies separately between the Ministry of Economy and Finance of South Korea and the U.S. Department of the Treasury. Deputy Prime Minister Choi stated, "The discussions will focus on four areas," adding, "The currency will be discussed by the two countries' treasuries, while the others will be handled by the Ministry of Trade, Industry and Energy and the USTR, which will form a task force to address them." In response to a question about whether the U.S. side mentioned "currency manipulation" regarding currency discussions, Choi clarified, "There was absolutely no such content," and noted that "Bansen, the Treasury Secretary, first suggested discussing currency matters separately between the treasuries."
The issue of the cost-sharing for the defense of the U.S. troops in South Korea and the renegotiation of the free trade agreement (FTA) were not discussed during the 2+2 consultations. Deputy Prime Minister Choi said, "There was no mention of defense costs during today’s consultation," and Minister Ahn added, "There was no discussion regarding the FTA renegotiation."
Deputy Prime Minister Choi summarized the consultation by stating, "We narrowed down the scope of the issues and formed a consensus on the schedule of discussions, thus laying the groundwork for the consultation framework." He added, "We will do our best to achieve meaningful outcomes regarding the U.S. tariff policy before the reciprocal tariff suspension expires on July 8."