South Korea and the U.S. reaffirmed their commitment to pursue a mutually beneficial trade agreement ahead of the Aug. 1 deadline when duties are set to rise, the Asian nation’s industry ministry said.
U.S. Commerce Secretary Howard Lutnick and South Korea’s Industry Minister Kim Jung-kwan discussed sectoral and reciprocal tariffs on Thursday, with Kim emphasizing the need to ease trade barriers, according to a statement from South Korea’s Ministry of Trade, Industry and Energy. Both sides agreed to strengthen manufacturing cooperation and continue discussions, the statement showed on Friday.
The meeting came after the U.S. postponed the so-called “2+2” dialogue originally planned for Friday, which would have brought together top finance and trade officials from both countries, including Treasury Secretary Scott Bessent. The meeting involving Bessent is being delayed due to a scheduling conflict, a Treasury spokesperson said in an emailed response.
South Korea had viewed the Friday meeting as a critical opportunity to advance trade negotiations and avert an increase in sweeping tariffs to 25% threatened by President Donald Trump. In recent weeks, Seoul has been weighing politically sensitive concessions in areas like agriculture, energy and defense to shield its export-reliant economy.
Kim also met with U.S. Energy Secretary Chris Wright on Wednesday to discuss cooperation on clean energy and energy security, the statement from the industry ministry said. Separately, Trade Minister Yeo Han-koo is scheduled to meet with Trade Representative Jamieson Greer.
As part of the broader negotiations, the two countries are exploring the creation of a joint investment fund to channel South Korean capital into U.S.-based projects, according to sources familiar with the talks. Seoul is preparing to propose at least $100 billion in investment pledges, which would be secured through consultations with the nation’s major conglomerates, Yonhap News reported Thursday.
Failure to reach a deal could put Korean exporters at a disadvantage and would be a setback as overseas shipments were equivalent to more than 40% of South Korea’s GDP in 2024. Earlier this week, Japan secured a trade agreement with the U.S. that includes reduced 15% tariffs in exchange for supporting a $550 billion fund and committing to strategic purchases from American suppliers.
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