Korea’s Tariff Troubles: Could Negotiations Lower Costs for Exports?

Korea may face US tariffs of between 15 to 18 percent as the country scrambles to cut a better deal with Washington, a former US trade official said Friday

Michael Beeman, former assistant US trade representative for Japan, Korea and APEC, believes South Korea could potentially negotiate lower tariffs, but not without concessions. In a video podcast released by the Korea Economic Institute, Beeman stated, “I see countries like Korea and Japan in a similar position. They might avoid the highest threatened tariffs, but only through some kind of deal.”

Beeman, who served as a US trade official from January 2017 to 2023 during Trump’s first term, suggests that South Korea could potentially reduce tariffs to the 15 to 18 percent range if negotiations result in an agreement that satisfies the White House.

“That’s still a substantial tariff on many exports,” Beeman noted. “While South Korea may be able to negotiate more favorable terms for some sectors like auto and steel, significant tariffs are likely to remain.”

On July 7, President Donald Trump sent an open letter to South Korean President Lee Jae Myung, announcing a 25 percent tariff on all South Korean imports to the US, effective August 1. Trump warned of further increases if South Korea raises tariffs on US imports.

Commenting on the threat of increased tariffs, Beeman described the Trump administration’s approach as “chaotic” compared to previous administrations, adding that he believes this unpredictability is intentional.

“This strategy, which the Trump administration dabbled with during his first term, has come back in full force,” Beeman explained. “It’s all about creating uncertainty in the business environment.”

Since the South Korean presidential election in early June, the Lee administration has been aggressively pursuing tariff negotiations with the US. Over the past month, they’ve held numerous high-level and working-level meetings with American counterparts.

Beeman cited South Korea’s auto sector as an example of how countries might negotiate more favorable terms. The sector has seen a steady decline in US-bound exports since Trump’s 25 percent tariff on all vehicle imports took effect on April 1.

“South Korea might receive some concessions based on the relatively small number of US car exports to Korea,” Beeman suggested. “In exchange, they could negotiate lower tariffs for a portion of their exports, rather than for all of South Korea’s exports.”

“President Trump has made trade central to evaluating relationships with every country,” Beeman concluded. “The outcome will largely depend on how well South Korea can present itself as a willing partner to the US, and how that aligns with the president’s vision.”