Koo Yun-cheol: The Man Tasked with Reviving South Korea’s Economy and Trade Relations

Seasoned bureaucrat Koo Yun-cheol was inaugurated as South Korea’s Deputy Prime Minister and Finance Minister on Monday, ending a three-month leadership vacuum at the ministry tasked with resolving US tariff talks, accelerating tax reforms and leading an AI-driven economic overhaul.

Koo’s first official business trip is set for the US, though the exact schedule remains undisclosed at press time. This trip’s top billing on Koo’s agenda underscores Seoul’s urgency in addressing trade negotiations, particularly concerning tariffs on automobiles, steel, and aluminum, as well as US demands for expanded market access.

Koo emphasized that national interests and pragmatism would guide his approach to the trade talks.

\”I will visit the US as soon as possible to explain Korea’s position and work tirelessly to secure the best possible outcome in the tariff negotiations,\” Koo stated following his inauguration ceremony at the government complex in Sejong.

Reports suggest that Koo and Industry Minister Kim Jung-kwan are coordinating efforts to meet with US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer as part of a broader push for high-level 2+2 talks.

Key negotiating objectives include adjusting the 25 percent tariffs on critical industries and addressing US requests such as easing online platform regulations, permitting high-precision mapping data exports, increasing LNG imports, and fostering industrial cooperation, particularly in shipbuilding and the Alaska gas pipeline project.

Another pressing issue on Koo’s agenda is a major tax reform package, expected to be unveiled soon.

These reforms are likely to reverse some of the tax cuts introduced by the previous administration, with a focus on raising corporate tax rates.

This move comes in response to declining corporate tax revenues, which plummeted from approximately 100 trillion KRW (71.8 billion USD) in 2022 to around 60 trillion KRW (45 billion USD) last year. While the economic slowdown is largely responsible for the drop in corporate taxes, these reforms carry significant symbolic weight as the administration’s first major fiscal initiative.

Discussions include lowering the capital gains tax threshold for major shareholders and reinstating certain securities transaction taxes that have been kept at near-zero rates.

Critics argue that current policies disproportionately benefit ultra-wealthy investors and create excessive tax exemptions, diverging from broader efforts to achieve fiscal equity. The upcoming reforms aim to restore balance, boost revenue, and address long-standing concerns over tax fairness.

Koo’s vision heavily emphasizes the role of AI in shaping the economy.

He stresses that the government must prioritize an AI-driven economic transformation to break free from outdated growth models and address declining potential growth and widening sector disparities.

During a confirmation hearing before the National Assembly’s Finance and Economy Committee on Thursday, Koo proposed establishing a dedicated AI division within the ministry. He emphasized that AI initiatives should focus on areas where regions and industries have competitive advantages.

\”It’s not about applying AI across all industries but honing in on the items that can excel. To do that, we need to eliminate regulations and consider injecting unlimited funds,\” he stated.