U.S. President Donald Trump announced the reciprocal tariff rates to be imposed on 14 countries, including Korea, delaying the effective date of the tariffs by three weeks. Experts have commented that this is a strategy to "put pressure on all countries to reach early agreements in negotiations," advising, "Given the tight deadline for negotiations, we also need to hurry and work towards a broad agreement like the United Kingdom or Vietnam."
On July 7, Trump signed an executive order extending the deadline for imposing reciprocal tariffs until next month on the 1st, which pushed the negotiation deadline back by more than three weeks. Trump also sent an official letter to 14 countries, including Korea and Japan, while releasing the letter on his social media.
According to the letter, the U.S. plans to impose reciprocal tariffs starting on the 1st of next month: 25% on Korea, Japan, Malaysia, Kazakhstan, and Tunisia; 30% on South Africa and Bosnia and Herzegovina; 32% on Indonesia; 35% on Bangladesh and Serbia; 36% on Thailand and Cambodia; and 40% on Laos and Myanmar.
According to the Ministry of Trade, Industry and Energy, the reciprocal tariff rate for Korea remains the same as before (10+15%), and it has been reported that no additional reciprocal tariffs will be imposed on specific tariff items. Currently, the U.S. imposes tariffs of up to 50% on foreign steel and aluminum, and 25% on automobiles. Because of this, some analyses suggest that "the worst has been avoided."
Experts note that this action "puts pressure on countries close to concluding negotiations to reach agreements quickly," adding, "If tariffs are imposed on July 9, the U.S. economy could also be affected, so it seems there is an intention to avoid that."
Choi Seok-young, advisor at Lee & Ko law firm, stated, "Trump's strategy is to create tension not only for the countries that received the letter but also for those that did not," explaining that he is "putting as much pressure as possible on the opposing countries while minimizing damage to his own country." Park Tae-ho, head of the Korea International Trade Institute, also analyzed, "This letter is a pressure and signal to 'wrap up negotiations quickly,' noting that both Japan, with the House of Councilors election, and Korea, with the政권 change, had limited time to work with."
Since the negotiation deadline has been extended, the government plans to do its best to engage in negotiations. Yeo Han-koo, head of the Trade Negotiation Headquarters of the Ministry of Trade, Industry and Energy, discussed matters with the U.S. Secretary of Commerce on July 7 and plans to stay in Washington, D.C., for a while to focus on final negotiations. On the same day, National Security Office Chief Wi Seong-rok also discussed the development of Korea-U.S. relations through consultations with U.S. Secretary of State Marco Rubio.
However, experts emphasize that "time for negotiations is still tight," stating that "rather than fine-tuning the details, agreements should be reached from the broad framework of negotiations like with the United Kingdom or Vietnam."
Earlier, on May 8, the U.S. and the United Kingdom reached an agreement. The U.S. proposed a 10% tariff on up to 100,000 British cars, the abolition of tariffs on British steel and aluminum, and maintaining a basic tariff of 10%, while the U.K. agreed to open its markets for ethanol, beef, agricultural products, and machinery to the U.S. and to lower non-tariff barriers. The details are to be decided later.
The U.S. and Vietnam also verbally concluded a trade agreement on the 2nd. Vietnam agreed to open its market for U.S. agricultural and industrial products in exchange for a 20% tariff rate, as well as to increase aircraft purchases from the U.S. This is more of a simplified "framework" level rather than a comprehensive trade agreement, indicating that additional negotiations are expected in the coming months.
Choi Yong-min, former head of the International Trade Institute of the Korea International Trade Association, stated, "If we just set the framework for negotiations like the cases of the United Kingdom and Vietnam, we can delay the timing of the tariffs," adding, "It will be difficult to sort out all the details by August 1, so an agreement on the basic structure is necessary."
He said, "Rather than discussing too specifically by industry, the government should create a joint platform for Korea-U.S. corporations and proceed with joint investments or projects between the two sides."
Meanwhile, there were opinions that rather than passively accepting the conditions proposed by the U.S., we should assert our requests and proactively derive agreements in mutually beneficial areas.
Jeong Cheol, president of the Korea Economic Research Institute, said, "Since Korea and the U.S. are both parties to the Free Trade Agreement (FTA), they cannot be compared on the same level as other countries," urging that "we must lead negotiations to lower the tariff rate to the basic level of 10%."
Choi also emphasized that "with the passage of the 'Trump tax cut law,' the tax credits offered for the purchase of electric vehicles are expected to be abolished prematurely, which would negatively affect Korean corporations that have expanded local investments," stating that "we should not unilaterally concede, but rather clearly present the needs and issues that our companies face to find solutions that enable a 'win-win' situation."