Seoul, Washington agree on July tariff deal framework in '2+2' trade talks

WASHINGTON, D.C. – South Korea and the US have agreed to work together to craft a comprehensive tariff-liberalization package by July 8, marking the first formal bilateral negotiations on trade barriers under the new Donald Trump administration.

Senior Korean officials, including Finance Minister Choi Sang-mok and Trade and Industry Minister Ahn Duk-geun, met with US Treasury Secretary Scott Besent and US Trade Representative (USTR) chief Jamieson Greer in Washington on Thursday for a “2+2” format meeting aimed at recalibrating the two allies’ economic and trade relations.

The meeting concluded with agreement to pursue what was dubbed the “July Package” – a roadmap to dismantle both reciprocal and sector-specific tariffs, with particular focus on automobiles, semiconductors, shipbuilding and liquefied natural gas (LNG).

The two sides also discussed broader economic security cooperation, including investment frameworks and currency policy, according to the Korean government.

“Today we conveyed Korean people’s deep concerns over the reciprocal and itemized tariffs imposed by the US and reiterated Korea’s position as a trusted partner,” said Choi at a press briefing at the Korean embassy in Washington.

Seoul emphasized the potential negative economic impact of the US tariffs on imported vehicles, in particular, he said.

‘THEY BROUGHT THEIR A GAME’

The 2+2 talks reflect a shift in US trade posture as President Trump’s team reengages key trading partners with a more transactional approach focused on US industry gains.

Greer is expected to visit Seoul next month for the APEC Trade Ministers’ Meeting, which kicks off on May 15 for a two-day run, during which additional high-level consultations are planned, according to Korean government officials.

Greer and Ahn also met separately later on Thursday, agreeing to set up multiple working groups to address technical and sectoral issues, laying the groundwork for a potential memorandum of understanding as early as next week, government sources said.

“They brought their A game,” Secretary Bessent told reporters after a meeting at the White House with Norwegian Prime Minister Jonas Gahr Støre, signaling US satisfaction with Korea’s proposals.

MEASURED, ORDERLY NEGOTIATIONS

Korea's strategy, according to Choi, is driven by the need for “measured and orderly” negotiations, given the ongoing domestic political transition.

“It is difficult to rush a final agreement given the legislative and regulatory processes involved,” he said. “Still, Seoul is determined to secure tangible progress before the current reciprocal tariff waiver expires on July 8.”

Korea is set for an early presidential election on June 3, after former President Yoon Suk Yeol’s impeachment stemming from his short-lived martial law declaration on Dec. 3, which triggered a sharp, months-long divide between his supporters and opponents.

Analysts said domestic political uncertainty is adding to Korea’s economic drag.

NO DISCUSSION OF DEFENSE COST-SHARING

Trade Minister Ahn outlined Korea’s push for a reciprocal removal of tariffs in sectors such as energy security, particularly LNG, and shipbuilding – business areas the US is keen to revitalize for its own economic growth.

“We proposed mutually beneficial pathways, including sustainable trade practices and joint investment in US shipbuilding capacity,” Ahn said, hinting at alignment with the Trump administration’s broader industrial agenda.

The issue of currency policy also featured prominently, with both governments agreeing to address it through separate consultations between their respective finance ministries. Choi said that Bessent initiated the topic, though no specifics were disclosed.

Notably absent from the talks was any discussion of defense cost-sharing, a contentious issue in prior bilateral engagements.

When asked whether Korea’s acting President Han Duck-soo or other senior government officials had provided strategic guidance, Choi said, “There was none.”

ALASKA LNG PROJECT

The 2+2 talks come as US pressure mounts on Korea and Japan to invest in the $44 billion Alaska LNG project – a cornerstone of President Trump’s energy strategy.

According to the New York Times, the White House aims to secure letters of intent from Seoul and Tokyo at a June 2 energy summit in Alaska. Taiwan reportedly signed a similar commitment last month. However, Minister Ahn said no such request had been made during this week’s talks.

Bessent, meanwhile, remained bullish on the trajectory of negotiations.

“We’re moving faster than I thought we could,” he told reporters. “We may reach an agreement on understanding as early as next week and start detailing the technical terms.”

The precise content of those technical terms remains unclear. Ahn noted that Bessent’s language diverged from traditional trade diplomacy and suggested that more concrete details will emerge in forthcoming USTR releases.

The atmosphere, Choi stressed, was constructive. “This was the first official consultation on tariff policy between our two nations, and it proceeded in a friendly and positive tone. We expect further working-level discussions and high-level engagements to follow.”

Write to Sang-eun Lucia Lee at selee@hankyung.com

In-Soo Nam edited this article.