President Lee Jae Myung presides over a meeting with senior aides and secretaries at the presidential office in Seoul on July 31, 2025. (Image courtesy of Yonhap)
SEOUL, July 31 (Korea Bizwire) — South Korea’s tariff deal with the United States has eased trade uncertainty for the export-driven economy, but President Lee Jae Myung now faces a tougher test of navigating complex alliance and security issues when he meets U.S. President Donald Trump in the coming weeks.
Lee confronted a significant challenge immediately after taking office in early June, as the Trump administration threatened to impose 25 percent reciprocal tariffs and other sectoral duties — a move that could have dealt a heavy blow to South Korea’s export-driven economy.
In a breakthrough, Seoul and Washington clinched a deal that lowered baseline and auto-specific tariffs to 15 percent in return for a US$350 billion Korean investment pledge in the U.S. and $100 billion in energy purchases. Seoul officials said the deal does not include further opening of the sensitive rice and beef market.
“We have cleared a major hurdle,” Lee wrote on Facebook. “Through this agreement, the government has eliminated uncertainties in the export environment and created conditions for our companies to compete on equal or superior terms with major countries.”
Lee said the agreement, which includes a $150 billion commitment dedicated to the shipbuilding industry, reflects U.S. interest in revitalizing its manufacturing sector and Seoul’s determination to support Korean companies’ entry into the American market.
The deal also allowed the new administration to avoid a flashpoint, as any further opening of the rice and beef markets could have triggered strong protests from farmers and deepened divisions within his Democratic Party, potentially ending his political honeymoon.
With trade uncertainty eased, the Lee administration is expected to shift its focus to security issues at the upcoming summit, as the Trump administration has pressed allies to pay more for their defense and join Washington’s efforts to address an increasingly assertive China.
Trump said the details of Seoul’s investment plan will be unveiled when Lee visits the White House for a summit “within the next two weeks,” which would mark their first one-on-one meeting since Lee took office.
On the timing of the Lee-Trump summit, Kim Yong-beom, the presidential chief of staff for policy, said Trump told U.S. State of Secretary Marco Rubio to arrange a date as early as next week.
“The specific date and format will be discussed through diplomatic channels between South Korea and the U.S.,” he said, noting Foreign Minister Cho Hyun is scheduled to meet Rubio in Washington soon.
South Korea is seeking to strengthen security ties with Washington as North Korea deepens military cooperation with Russia and advances its nuclear weapons program, while also striving to maintain stable relations with China, its largest trading partner.
Earlier this month, Trump said South Korea pays the U.S. “very little” for its military support, reinforcing speculation that his administration may demand a sharp increase in Seoul’s contribution to the cost of stationing the 28,500-strong U.S. Forces Korea
In addition, the Pentagon recently said South Korea and other Asian allies are subject to a new “global standard,” calling for defense spending equivalent to 5 percent of gross domestic product, a target similar to that set for North Atlantic Treaty Organization allies.
North Korea is also expected to be a key agenda item at the upcoming talks, amid speculation that Trump may seek to revive his personal diplomacy with North Korean leader Kim Jong-un following their three summits in 2018 and 2019.
Earlier this week, Kim Yo-jong, the North Korean leader’s influential sister, dismissed the prospect of denuclearization talks but noted that the personal relationship between Trump and Kim is “not bad.” In response, a White House official said Trump is open to engagement with Kim to pursue a “fully denuclearized” North Korea.
Trump’s engagement with the North’s leader, if realized, could go along with President Lee’s North Korea policy, which aims to mend inter-Korean ties after the hard-line stance taken by former conservative President Yoon Suk Yeol.
In a conciliatory gesture last month, Seoul suspended loudspeaker propaganda broadcasts against the North along the inter-Korean border and urged activists to stop flying leaflets toward the North.
After Pyongyang rejected Seoul’s dialogue offer, the presidential office said it will maintain close coordination with Washington on North Korea policy, including possible talks — a move seen as an effort to prevent South Korea from being sidelined by Trump’s direct dealings with the North.
(Yonhap)
