South Korea urges for 'mutually beneficial' trade deal with US to avert tariff threat

South Korea is urging the United States to strike a “mutually beneficial” trade deal, as tensions rise over looming tariffs that could hit key Korean exports. During his first official trip to Washington this week, South Korea’s new trade minister, Yeo Han-koo, pushed for a broader, forward-looking agreement. As per Bloomberg, Yeo met US Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer, Interior Secretary Doug Burgum, and US lawmakers. The high-stakes meetings come ahead of a 9 July deadline when higher tariffs paused in April could be reinstated.

Turning crisis into opportunity

In a statement released on Saturday, South Korea’s Trade Ministry shared Yeo’s message of cooperation “The ongoing negotiations are not merely for tariffs but also an opportunity to establish a new framework for future cooperation,” Yeo said in a statement as quoted by Bloomberg.

He promised to “fiercely engage” in talks to ensure that momentum for collaboration between Seoul and Washington isn’t lost. Yeo framed the discussions as a chance to turn the “current crisis into an opportunity,” as per Bloomberg.

South Korea’s trade dependency on the US

South Korea and the US share a deeply interdependent trade relationship. The United States is South Korea’s second-largest export market, buying goods ranging from cars to semiconductors and batteries. These products are critical for South Korea’s economy and vital to US manufacturing supply chains.

Meanwhile, South Korea is a key US ally in East Asia, offering advanced manufacturing capacity, cutting-edge tech development, and strategic security cooperation. Any significant increase in US tariffs would hit South Korean exporters hard. The country’s economy is already feeling the pinch from slowing domestic consumption. The Bank of Korea last month slashed its 2025 GDP growth forecast to just 0.8 per cent from 1.5 per cent, underlining the risk of further economic stress.

Industry concerns over US export controls

Beyond tariffs, Yeo also raised industry worries about tightening US export controls. Washington has been imposing stricter rules on technology transfers, especially to countries like China, in an effort to secure critical tech supply chains and limit military applications.

South Korean companies heavily involved in semiconductor production and advanced manufacturing, fear they could get caught in the crossfire.

US says talks underway with multiple nations

As per Bloomberg, US Commerce Secretary Howard Lutnick confirmed Washington is working to finalise trade deals with around 10 countries ahead of the July 9 deadline. Speaking on Bloomberg Television, Lutnick said that President Donald Trump might extend the deadline if talks progress, but he did not specify which nations were involved.

Negotiating partners will get a “response,” he said, offering some hope of flexibility. But as per Yonhap News, a senior South Korean official in Washington made clear that Seoul has not received any notification of an extension, saying the country is not yet in a position to “feel assured.”

Tariffs risk harming a vital partnership

For both sides, the stakes are high. South Korea is not only a top trade partner but also a major hub for critical industries, including electric vehicle batteries, semiconductors, and automotive manufacturing. A 25 per cent across-the-board tariff would risk disrupting global supply chains, push up costs for US manufacturers, and worsen inflation pressures. Seoul’s push for a new deal isn’t just about avoiding immediate pain. It’s also about defining a modern trade framework that strengthens the alliance in the face of rising global competition, particularly from China.

As negotiations continue, all eyes will be on Washington to see if a last-minute deal can keep the trade partnership on track.

(With inputs from the agencies)