South Korea’s top trade chief urges caution over US tariff risks

[SEOUL] South Korea’s top trade chief said the threat of higher US tariffs persists, while stressing the need to carefully manage other issues, including those related to Coupang, to ensure they don’t escalate into broader sources of friction.

Trade Minister Yeo Han-koo said that Seoul has conveyed to Washington that it’s prepared to move swiftly to follow through on commitments agreed with the US last year. That includes speeding up parliamentary work on the so-called Special Law on Strategic Investment with the US.

He said that US concerns have largely centred on perceptions that deliberations in the National Assembly regarding the legislation have been delayed, raising doubts about South Korea’s willingness to implement the deal. Yeo said Seoul has communicated that it is working to accelerate that process through bipartisan cooperation.

The risk of higher tariffs has resurfaced for South Korea at a time when the US is moving to resolve trade friction with other nations, including India. Trade is a pillar of the economy in South Korea, where exports are equivalent to about 40 per cent of gross domestic product. The US is the country’s second-largest market.

Yeo also sought to downplay the significance of a potential notice being posted to the US Federal Register, describing the posting as part of Washington’s internal administrative processes. Even if such a notice is issued, the key question for South Korea would be whether any tariff increase takes effect immediately or after a one-to-two-month grace period.

“As we still have time for talks, we’ll continue to engage closely with the US and make every effort to ensure the outcome is as favourable as possible to our national interest,” Yeo told reporters on Thursday (Feb 5) upon his return from Washington. “We are holding talks on the basis that posting the official notice on the Federal Register itself is not necessary.”

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On other matters, such as Coupang, Yeo declined to provide details, citing the sensitivity of ongoing trade talks. He said the joint fact sheet agreed by the two nations covers not only investment pledges but also non-tariff elements that need to be handled carefully to prevent unnecessary friction.

South Korean officials have repeatedly said Donald Trump’s threat to raise the tariff on imports from Korea is unrelated to an investigation into a data breach at Coupang, even as the case has fuelled US complaints over Seoul’s digital regulation and alleged discriminatory scrutiny of the US-listed company. BLOOMBERG