Key Points

Trade experts expressed concerns over the Trump administration's tariff measures during a public hearing aimed at gathering opinions on Seoul's potential negotiation strategy before South Korea begins full-fledged tariff talks with the US. The hearing was held as part of the necessary procedures for signing a trade agreement under the Act on the Conclusion Procedure and Implementation of Commercial Treaties, according to the Ministry of Trade, Industry and Energy.

Yang Joo-young, director of economic security and trade strategy research at the Korea Institute for Industrial Economics & Trade, warned that the US administration's hefty tariff measures could inflict structural damage on Korean industries, not only causing a decline in exports. She highlighted that the US accounts for over 18 percent of South Korea's exports and that the survival of key manufacturing industries like automobiles, semiconductors, batteries, and machine equipment depends directly on access to the US market.

Yang added that access to the US market will determine Korea's fate in the global technology war and supply chain restructuring. She urged the government to seek not only tariff exemptions but also expanded bilateral industrial cooperation in key sectors such as defense, shipbuilding, and energy during trade negotiations with the US.

A feasibility study by the Korea Institute for International Economic Policy (KIEP) indicated that South Korea’s gross domestic product could decrease by 0.3 to 0.4 percent if all US tariff measures, including those planned but not yet imposed, take full effect.

The Trump administration has imposed 50 percent duties on all steel imports and 25 percent tariffs on imported cars while planning to levy heavy tariffs on semiconductor and pharmaceutical imports soon. However, Kim Young-gui, a senior research fellow at KIEP, noted that if Seoul reaches a deal with Washington similar to those with Britain and China—while others fail to do so—the country might recover some of the expected export losses.

Officials from agriculture and livestock sectors raised concerns about Washington’s reported request for Seoul to lift regulations on imports such as the ban on American beef from cattle aged 30 months or older. Suh Jin-kyo, president of GS&J Institute, said that the cattle age issue is highly sensitive in Korea, and even starting discussions could provoke significant political and social controversy.

Suh also mentioned worries that lifting the cattle age restriction might reinforce negative perceptions of US beef among Korean consumers, potentially reducing current US beef exports to Korea.

In response, Chang Sung-gil, director-general for trade policy at the industry ministry, emphasized that the government has highlighted during trade talks with Washington that while the US had a $66 billion trade deficit in goods with Korea last year, it continues to post annual surpluses in services and agricultural sectors. He added that the US enjoys preferential benefits in the Korean market for its agricultural and livestock products under the bilateral free trade agreement. The government plans to consider the sensitivity of these issues in its negotiation strategy.

Seoul has been holding trade consultations with the Trump administration over recent months, aiming to craft a package deal by July 8—the end of a 90-day pause on US reciprocal tariffs. South Korea seeks full exemption or reduction of the Trump administration’s 25 percent reciprocal tariffs as well as sectoral tariffs on steel, automobiles, and other imports.

The two sides have discussed various measures to reduce Korea’s large trade surplus with the US and to address US claims about South Korea's non-tariff measures, including proposed regulations on online platforms and restrictions on exporting high-precision location data.

Vice Trade Minister Park Jong-won stated that Seoul will pursue tariff negotiations with the US based on prioritizing national interest. The government plans to review opinions from the public hearing comprehensively, reflect them in its negotiation strategy, and report to the National Assembly before launching full-scale trade negotiations with the US.

- IANS