United States and South Korea failed to reach a conclusion after the first day of face-to-face trade talks, Yonhap News Agency reported on Friday, as tensions rose following President Donald Trump’s threat to raise tariffs on Korean goods. South Korea’s Industry Minister Kim Jung-kwan met U.S. Commerce Secretary Howard Lutnick in Washington and is expected to continue discussions, according to Yonhap.
Trump Raises Tariff Pressure
Trump escalated the dispute this week by announcing plans to raise “reciprocal” tariffs on South Korean exports — including automobiles, lumber and pharmaceuticals, from 15% to 25%. He blamed delays in Seoul’s legislature in ratifying a trade agreement reached last year that ties tariff relief to major South Korean investments in the U.S. economy.
On social media Monday, Trump complained the bills had not been passed and vowed to increase duties, remarks that caught Seoul by surprise and prompted officials to rush to reassure Washington of their commitment to the deal. A day later, Trump said both sides would work out a solution.
High Economic Stakes
Analysts say the legislative stalemate is feeding protectionist sentiment in Washington and complicating implementation of the 2025 accord. The agreement envisions roughly $350 billion in South Korean investment in U.S. sectors such as semiconductors and energy in exchange for lower tariffs.
Economists warn a prolonged impasse could hurt South Korea’s export-driven economy, particularly its auto industry, forcing negotiators to balance domestic political constraints with the need to preserve a key trade partnership.
South Korea’s trade envoy Yeo Han-koo has also travelled to Washington for talks with U.S. trade negotiator Jamieson Greer as both sides seek to break the deadlock.
(With inputs from Reuters)
