Acting President and Prime Minister Han Duck-soo said on Apr. 14 that South Korea has entered a critical phase of trade talks with the United States, noting that negotiations are now underway in earnest. U.S. President Donald Trump has reportedly instructed his team to begin discussions with South Korea, Japan and India among 75 countries affected by the proposed reciprocal tariff regime. With Seoul at the forefront of the negotiations, it has no precedent to rely on from other nations. The country’s overall ability to respond is now being put to the test.
During his first term, Trump had also accused South Korea of running an unfair trade surplus and pressured Seoul into renegotiating the Korea–U.S. Free Trade Agreement (KORUS FTA). At the time, the South Korean negotiating team managed to preserve the agreement by offering concessions, including on pickup truck tariffs. However, Trump’s decision in his second term to impose a 25% reciprocal tariff on South Korea effectively renders the KORUS FTA meaningless. It is unlikely that similar concessions will suffice this time to preserve the existing trade framework.
Still, negotiators must make a strong case that the KORUS FTA has brought mutual benefits since its implementation in 2012. According to the Korea Institute for International Economic Policy (KIEP), South Korea gained an additional $10 billion in annual trade surplus with the United States over the past decade, but at the same time, South Korean investment in the U.S. also increased by $7.7 billion annually, contributing to American job creation. The data suggests that both sides have profited.
As of last year, South Korean companies have invested a cumulative $130 billion in building factories in the U.S., with more than 15,000 Korean firms now operating there. Much of South Korea’s trade surplus stems from intermediate goods shipped from Korea to support these companies’ U.S. manufacturing operations—roughly 60% of the components used in production are sourced from Korea. These are logical and verifiable points that even the U.S. side can acknowledge.
Moreover, highlighting South Korea’s manufacturing capabilities as essential to the U.S.’ long-term strategy to restructure global supply chains could serve as valuable leverage in the talks.
South Korea’s economy is more export-dependent than any other country in the world. Last year’s 2.0% economic growth included 1.9% that was driven by exports. The U.S. alone makes up 20% of South Korea’s total exports. If the proposed 25% reciprocal tariff is enforced as planned, it will inevitably reduce exports to the U.S. and drag down the nation’s growth rate. The outcome of the trade negotiations with Washington will directly impact the future of South Korean exports.
Regardless of who wins the presidential election in two months, the trade agreement reached now will become a fixed element in the next administration’s economic policy. In that sense, the outcome of these negotiations may prove as consequential—if not more so—than the election itself. It could have an even more direct impact on the daily lives of ordinary citizens.
That is why the government must rise above partisan politics to develop a comprehensive, national-level negotiation strategy. It must also ensure that accountability for the outcome is shared by all.
