<p>Despite growing fears of fresh US tariffs, South Korea’s exports held up in early July. This refelects that the trade-dependent economy is still showing resilience. But officials in Seoul are on edge, as the clock ticks toward an August 1 deadline when broader US duties could take effect.</p><h2><strong>Early July exports signal momentum</strong></h2><p>According to data released by South Korea’s customs office on Monday, exports rose 4.1 per cent in the first 20 days of July after adjusting for working-day differences, compared to the same period last year. While that’s slightly below June’s 6.8 per cent growth, it marks a solid performance amid rising global trade tensions.</p><p>&nbsp;</p><p>Unadjusted exports, however, dipped 2.2 per cent. Imports fell 4.3 per cent, resulting in a trade surplus of $465 million. As per Bloomberg, the figures may calm near-term concerns over export demand but reveal underlying risks from deepening global protectionism.</p><h2><strong>Tariff risks remain as Trump deadline nears</strong></h2><p>South Korea is racing to secure a trade deal with the United States ahead of the August 1 deadline, when US President Donald Trump is expected to decide on a 25 per cent reciprocal tariff on all Korean goods. While that broader measure is still paused, key industries are already feeling the pinch. Auto and steel exports continue to face sector-specific duties, and Trump has warned that semiconductors, South Korea’s top export, could be next.</p><p>&nbsp;</p><p>Steel shipments dropped 9.7 per cent in early July, reflecting the impact of the existing 50 per cent tariff. Meanwhile, exports to the US fell 2.1 per cent, and imports from the US plunged 28.4 per cent, signalling the strain on bilateral trade.</p><h2><strong>Political setbacks hamper Seoul’s response</strong></h2><p>South Korea’s response has been delayed by months of political gridlock following the impeachment of former President Yoon Suk Yeol. The new administration under President Lee Jae Myung is now trying to speed up talks with Washington, but Seoul still lags behind other allies in securing tariff exemptions.</p><p>&nbsp;</p><p>To support the economy, the government has rolled out a supplementary budget worth 31.8 trillion won ($23.3 billion), aimed at shielding households and industries from external shocks.</p><h2><strong>Semiconductors shine, but outlook still fragile</strong></h2><p>Despite the uncertainty, semiconductors, South Korea’s largest export saw a 16.5 per cent rise in early July, offering some relief. Auto exports also climbed 3.9 per cent. However, shipments to China, a key market, slipped 5.9 per cent, while exports to the European Union rose 3 per cent.</p><p>&nbsp;</p><p>South Korea’s economy shrank in the first quarter of 2025, prompting the central bank to cut interest rates to 2.5 per cent and slash its annual growth forecast to just 0.8 per cent.</p><p>&nbsp;</p><p>Early July trade figures show that South Korea’s export engine is still running, for now. But with the threat of sweeping US tariffs just days away, the outlook for Asia’s fourth-largest economy hangs in the balance.</p><p>&nbsp;</p><p>&nbsp;</p><p><i>(With inputs from agencies)</i></p>

Political delays hinder negotiations for tariff exemptions, while a supplementary budget aims to shield the economy from external shocks amidst uncertain global trade conditions.

Despite growing fears of fresh US tariffs, South Korea’s exports held up in early July. This refelects that the trade-dependent economy is still showing resilience. But officials in Seoul are on edge, as the clock ticks toward an August 1 deadline when broader US duties could take effect. Early July exports signal momentum According to data released by South Korea’s customs office on Monday, exports rose 4.1 per cent in the first 20 days of July after adjusting for working-day differences, compared to the same period last year. While that’s slightly below June’s 6.8 per cent growth, it marks a solid performance amid rising global trade tensions. Unadjusted exports, however, dipped 2.2 per cent. Imports fell 4.3 per cent, resulting in a trade surplus of $465 million. As per Bloomberg, the figures may calm near-term concerns over export demand but reveal underlying risks from deepening global protectionism. Tariff risks remain as Trump deadline nears South Korea is racing to secure a trade deal with the United States ahead of the August 1 deadline, when US President Donald Trump is expected to decide on a 25 per cent reciprocal tariff on all Korean goods. While that broader measure is still paused, key industries are already feeling the pinch. Auto and steel exports continue to face sector-specific duties, and Trump has warned that semiconductors, South Korea’s top export, could be next. Steel shipments dropped 9.7 per cent in early July, reflecting the impact of the existing 50 per cent tariff. Meanwhile, exports to the US fell 2.1 per cent, and imports from the US plunged 28.4 per cent, signalling the strain on bilateral trade. Political setbacks hamper Seoul’s response South Korea’s response has been delayed by months of political gridlock following the impeachment of former President Yoon Suk Yeol. The new administration under President Lee Jae Myung is now trying to speed up talks with Washington, but Seoul still lags behind other allies in securing tariff exemptions. To support the economy, the government has rolled out a supplementary budget worth 31.8 trillion won ($23.3 billion), aimed at shielding households and industries from external shocks. Semiconductors shine, but outlook still fragile Despite the uncertainty, semiconductors, South Korea’s largest export saw a 16.5 per cent rise in early July, offering some relief. Auto exports also climbed 3.9 per cent. However, shipments to China, a key market, slipped 5.9 per cent, while exports to the European Union rose 3 per cent. South Korea’s economy shrank in the first quarter of 2025, prompting the central bank to cut interest rates to 2.5 per cent and slash its annual growth forecast to just 0.8 per cent. Early July trade figures show that South Korea’s export engine is still running, for now. But with the threat of sweeping US tariffs just days away, the outlook for Asia’s fourth-largest economy hangs in the balance. (With inputs from agencies)

<p>South Korea's exports rose 4.1% in early July, reflecting resilience amidst fears of new US tariffs. While adjusted figures show growth, unadjusted exports fell by 2.2%, and imports dipped 4.3%, yielding a trade surplus of $465 million.</p>

South Korea’s exports remain strong as US tariff threat looms

<p>South Korea is scrambling to seal an in-principle trade deal with the United States before a looming tariff deadline threatens to hit some of its most vital industries. With a 25 per cent tariff set to kick in on August 1, negotiators in Seoul are under growing pressure to find a compromise that will protect exports of cars and steel, key drivers of the country’s industrial base.</p><h2><strong>A tight deadline for a fragile agreement</strong></h2><p>South Korea’s Minister for Trade, Yeo Han-koo, suggested there was still hope for an “agreement in principle” before the deadline, but warned that a perfect, detailed treaty was unrealistic on such short notice. As reported by the Newsis news agency, Yeo said talks were progressing but that the next three weeks would be critical to avoid what he described as “unfair” tariffs from Washington.</p><p>&nbsp;</p><p>“Twenty days are not enough to come up with a perfect treaty that contains every detail,” Yeo told local media. He described the goal as agreeing on a broad framework that could head off Trump’s tariffs while buying time for more complex negotiations later.</p><h2><strong>Agriculture market access on the table</strong></h2><p>One of the most sensitive sticking points in the talks is agriculture. Traditionally a fiercely protected sector in South Korea, agriculture and livestock market access has now emerged as a potential bargaining chip. Yeo signalled that while “sensitive” areas would still need protection, Seoul could consider opening up some parts of the market to US exports as part of the broader deal.</p><p>&nbsp;</p><p>Such a move would be politically risky, given the power of South Korea’s farming lobby, but officials see it as necessary if it helps defuse Trump’s tariff threat.</p><h2><strong>Trade surplus under scrutiny</strong></h2><p>The urgency in Seoul is driven by fears of serious economic damage. According to Korea Customs Service data, South Korea posted a record $55.6 billion trade surplus with the US in 2024, up 25 per cent from the previous year, fuelled largely by surging car exports.</p><p>&nbsp;</p><p>Washington has long complained about that imbalance. Trump’s administration is demanding concrete measures to reduce the US trade deficit—echoing similar demands made during earlier rounds of trade fights with allies in Europe and Asia.</p><h2><strong>Tariffs on cars and steel a key battleground</strong></h2><p>For South Korea, the big worry is sector-specific tariffs that would hit its auto and steel industries hard. Trump has already threatened to impose 25 per cent duties on those goods if no deal is reached by August 1.</p><p>&nbsp;</p><p>South Korean officials hope that by offering concessions on agriculture and showing willingness to cut the surplus, they can secure exemptions similar to those the US granted Britain in past negotiations.</p><p>Yeo said there had been “considerable progress” on industrial issues, but stressed that both sides would need to make concessions.</p><h2><strong>Political turmoil complicates talks</strong></h2><p>South Korea’s rush to negotiate is also shaped by recent political upheaval. President Lee Jae-myung only took office on June 4, after months of instability following his predecessor’s removal over an attempted martial law declaration.</p><p>&nbsp;</p><p>That turmoil left Seoul with little time to respond to Trump’s tariff threats. Negotiations began in earnest only after the new administration was sworn in, forcing officials to work under intense pressure with the clock ticking.</p><h2><strong>Trump’s pressure tactics continue</strong></h2><p>Meanwhile, President Trump has kept up the public pressure. Speaking to reporters in Maryland, he said bluntly that “South Korea wants to make a deal right now,” but did not specify what terms Washington would accept or how quickly a final pact could be concluded.</p><p>&nbsp;</p><p>Analysts suggest Trump is looking for headline commitments that he can sell as a win to domestic voters—a reduction in the trade deficit, increased access for US farm exports, and new proof of his tough-on-trade stance.</p><h2><strong>A race against time</strong></h2><p>With less than three weeks to go before the deadline, both sides know the stakes are high. The tariffs would not only disrupt trade flows but could also strain broader security and diplomatic ties between the allies.</p><p>&nbsp;</p><p>For Seoul, the mission is clear: avoid an economic shock that could ripple through its industrial base. For Washington, the goal is to extract concessions that help balance the trade relationship.</p><p>As the deadline nears, negotiators on both sides face the delicate task of turning fragile progress into a deal that can withstand political scrutiny at home and avert a damaging escalation in one of Asia’s most important trade relationships.</p>

South Korea seeks urgent trade deal with US to avoid 25% tariffs on cars and steel, offering farm concessions amid rising political and economic pressure.

South Korea is scrambling to seal an in-principle trade deal with the United States before a looming tariff deadline threatens to hit some of its most vital industries. With a 25 per cent tariff set to kick in on August 1, negotiators in Seoul are under growing pressure to find a compromise that will protect exports of cars and steel, key drivers of the country’s industrial base. A tight deadline for a fragile agreement South Korea’s Minister for Trade, Yeo Han-koo, suggested there was still hope for an “agreement in principle” before the deadline, but warned that a perfect, detailed treaty was unrealistic on such short notice. As reported by the Newsis news agency, Yeo said talks were progressing but that the next three weeks would be critical to avoid what he described as “unfair” tariffs from Washington. “Twenty days are not enough to come up with a perfect treaty that contains every detail,” Yeo told local media. He described the goal as agreeing on a broad framework that could head off Trump’s tariffs while buying time for more complex negotiations later. Agriculture market access on the table One of the most sensitive sticking points in the talks is agriculture. Traditionally a fiercely protected sector in South Korea, agriculture and livestock market access has now emerged as a potential bargaining chip. Yeo signalled that while “sensitive” areas would still need protection, Seoul could consider opening up some parts of the market to US exports as part of the broader deal. Such a move would be politically risky, given the power of South Korea’s farming lobby, but officials see it as necessary if it helps defuse Trump’s tariff threat. Trade surplus under scrutiny The urgency in Seoul is driven by fears of serious economic damage. According to Korea Customs Service data, South Korea posted a record $55.6 billion trade surplus with the US in 2024, up 25 per cent from the previous year, fuelled largely by surging car exports. Washington has long complained about that imbalance. Trump’s administration is demanding concrete measures to reduce the US trade deficit—echoing similar demands made during earlier rounds of trade fights with allies in Europe and Asia. Tariffs on cars and steel a key battleground For South Korea, the big worry is sector-specific tariffs that would hit its auto and steel industries hard. Trump has already threatened to impose 25 per cent duties on those goods if no deal is reached by August 1. South Korean officials hope that by offering concessions on agriculture and showing willingness to cut the surplus, they can secure exemptions similar to those the US granted Britain in past negotiations. Yeo said there had been “considerable progress” on industrial issues, but stressed that both sides would need to make concessions. Political turmoil complicates talks South Korea’s rush to negotiate is also shaped by recent political upheaval. President Lee Jae-myung only took office on June 4, after months of instability following his predecessor’s removal over an attempted martial law declaration. That turmoil left Seoul with little time to respond to Trump’s tariff threats. Negotiations began in earnest only after the new administration was sworn in, forcing officials to work under intense pressure with the clock ticking. Trump’s pressure tactics continue Meanwhile, President Trump has kept up the public pressure. Speaking to reporters in Maryland, he said bluntly that “South Korea wants to make a deal right now,” but did not specify what terms Washington would accept or how quickly a final pact could be concluded. Analysts suggest Trump is looking for headline commitments that he can sell as a win to domestic voters—a reduction in the trade deficit, increased access for US farm exports, and new proof of his tough-on-trade stance. A race against time With less than three weeks to go before the deadline, both sides know the stakes are high. The tariffs would not only disrupt trade flows but could also strain broader security and diplomatic ties between the allies. For Seoul, the mission is clear: avoid an economic shock that could ripple through its industrial base. For Washington, the goal is to extract concessions that help balance the trade relationship. As the deadline nears, negotiators on both sides face the delicate task of turning fragile progress into a deal that can withstand political scrutiny at home and avert a damaging escalation in one of Asia’s most important trade relationships.

<p>South Korea is racing to secure an in-principle trade deal with the US before Trump’s August 1 tariff deadline threatens its key car and steel exports.</p>

South Korea races to avert US tariff threat with last-minute trade push

<p>South Korea says it will intensify negotiations with the United States in a last-ditch effort to avoid a threatened 25 per cent tariff, as President Donald Trump’s administration sets an August 1 deadline for the new duties.</p><h2><strong>Trump threatens new tariffs from August 1</strong></h2><p>President Trump announced on Monday that he would impose a 25 per cent tariff on South Korean goods from 1 August, posting formal letters to President Lee Jae Myung and Japan’s prime minister on his social media platform.</p><p>&nbsp;</p><p>In the letter to President Lee, Trump criticised what he called a lopsided trading relationship, urging Seoul to open “heretofore closed markets” and eliminate tariff and non-tariff barriers. According to South Korea’s Industry Ministry, the letter effectively grants a grace period before the new tariffs are enforced, as per Reuters.&nbsp;</p><h2><strong>Seoul promises intensified negotiations</strong></h2><p>In response, South Korea’s Industry Ministry said it would use the remaining time to secure a deal that could prevent the tariffs from taking effect. “We will step up negotiations during the remaining period to reach a mutually beneficial result to quickly resolve the uncertainties from tariffs,” the ministry said in an official statement, as quoted by Reuters.&nbsp;</p><p>&nbsp;</p><p>As per Reuters, South Korea also plans to use the window to address US concerns about its large trade surplus and overhaul domestic regulations. The ministry said it would pursue reforms through what it described as a “manufacturing renaissance partnership” with Washington.&nbsp;</p><h2><strong>Record trade surplus draws US scrutiny</strong></h2><p>As per Korea Customs Service data cited by Reuters, South Korea posted a record $55.6 billion trade surplus with the United States in 2024, up 25 per cent from the previous year. The imbalance has been driven largely by strong car exports, making South Korea a target for Trump’s renewed push on trade.</p><p>&nbsp;</p><p>Although the two countries have a free trade agreement, signed in 2007 and revised in 2018, economists note that South Korea’s effective tariff rates on US imports are near zero. However, Washington has continued to argue that non-tariff and regulatory barriers remain a major obstacle.</p><h2><strong>High-level diplomacy after political upheaval</strong></h2><p>President Lee Jae Myung, who took office on 4 June after a snap election, faces his first major foreign policy test with these negotiations. Lee has blamed his predecessor’s martial law declaration in December for weakening South Korea’s ability to respond quickly to Trump’s tariff demands.</p><p>&nbsp;</p><p>After initially sticking to technical-level discussions, Seoul has moved rapidly to high-level diplomacy. South Korea’s top trade envoy and National Security Advisor Wi Sung-lac have travelled to Washington in recent days for trade and defence talks.</p><h2><strong>Hopes for a last-minute deal</strong></h2><p>According to President Lee’s office, Wi met US Secretary of State Marco Rubio in Washington on Monday. The two agreed that a summit between Lee and Trump could help advance negotiations. Lee’s office cited Rubio as saying there was still time to reach a settlement before the deadline. “Tariff letters to major trading partners including South Korea were sent out today but there is still time until tariffs are implemented on August 1 so he hopes the two countries can communicate closely to reach an agreement before that,” Lee’s office said, as quoted by Reuters.&nbsp;</p><p>&nbsp;</p><p>Trump himself suggested the deadline was not entirely rigid. Asked if it was firm, he told reporters: “I would say firm, but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.”</p><h2><strong>Uncertainty for exporters</strong></h2><p>The Industry Ministry acknowledged in its statement that the new administration did not have enough time after Lee’s inauguration to settle all outstanding issues with Washington, despite what it called “intense negotiations”.</p><p>&nbsp;</p><p>As the 1 August deadline looms, the threat of new tariffs casts a shadow over one of Asia’s most critical trade relationships with the United States. For South Korea, securing an exemption could not only protect exporters from fresh costs but also prove that President Lee’s new government can restore stability to a vital alliance after months of domestic political turmoil.</p>

Facing a record trade surplus and rising US pressure, South Korea new government intensifies talks with Washington to prevent steep tariffs, with hopes pinned on high-level diplomacy and a potential Lee-Trump summit.

South Korea says it will intensify negotiations with the United States in a last-ditch effort to avoid a threatened 25 per cent tariff, as President Donald Trump’s administration sets an August 1 deadline for the new duties. Trump threatens new tariffs from August 1 President Trump announced on Monday that he would impose a 25 per cent tariff on South Korean goods from 1 August, posting formal letters to President Lee Jae Myung and Japan’s prime minister on his social media platform. In the letter to President Lee, Trump criticised what he called a lopsided trading relationship, urging Seoul to open “heretofore closed markets” and eliminate tariff and non-tariff barriers. According to South Korea’s Industry Ministry, the letter effectively grants a grace period before the new tariffs are enforced, as per Reuters. Seoul promises intensified negotiations In response, South Korea’s Industry Ministry said it would use the remaining time to secure a deal that could prevent the tariffs from taking effect. “We will step up negotiations during the remaining period to reach a mutually beneficial result to quickly resolve the uncertainties from tariffs,” the ministry said in an official statement, as quoted by Reuters. As per Reuters, South Korea also plans to use the window to address US concerns about its large trade surplus and overhaul domestic regulations. The ministry said it would pursue reforms through what it described as a “manufacturing renaissance partnership” with Washington. Record trade surplus draws US scrutiny As per Korea Customs Service data cited by Reuters, South Korea posted a record $55.6 billion trade surplus with the United States in 2024, up 25 per cent from the previous year. The imbalance has been driven largely by strong car exports, making South Korea a target for Trump’s renewed push on trade. Although the two countries have a free trade agreement, signed in 2007 and revised in 2018, economists note that South Korea’s effective tariff rates on US imports are near zero. However, Washington has continued to argue that non-tariff and regulatory barriers remain a major obstacle. High-level diplomacy after political upheaval President Lee Jae Myung, who took office on 4 June after a snap election, faces his first major foreign policy test with these negotiations. Lee has blamed his predecessor’s martial law declaration in December for weakening South Korea’s ability to respond quickly to Trump’s tariff demands. After initially sticking to technical-level discussions, Seoul has moved rapidly to high-level diplomacy. South Korea’s top trade envoy and National Security Advisor Wi Sung-lac have travelled to Washington in recent days for trade and defence talks. Hopes for a last-minute deal According to President Lee’s office, Wi met US Secretary of State Marco Rubio in Washington on Monday. The two agreed that a summit between Lee and Trump could help advance negotiations. Lee’s office cited Rubio as saying there was still time to reach a settlement before the deadline. “Tariff letters to major trading partners including South Korea were sent out today but there is still time until tariffs are implemented on August 1 so he hopes the two countries can communicate closely to reach an agreement before that,” Lee’s office said, as quoted by Reuters. Trump himself suggested the deadline was not entirely rigid. Asked if it was firm, he told reporters: “I would say firm, but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.” Uncertainty for exporters The Industry Ministry acknowledged in its statement that the new administration did not have enough time after Lee’s inauguration to settle all outstanding issues with Washington, despite what it called “intense negotiations”. As the 1 August deadline looms, the threat of new tariffs casts a shadow over one of Asia’s most critical trade relationships with the United States. For South Korea, securing an exemption could not only protect exporters from fresh costs but also prove that President Lee’s new government can restore stability to a vital alliance after months of domestic political turmoil.

<p>South Korea is racing to negotiate a last-minute trade deal with the US to avoid Trump’s threatened 25% tariffs set to take effect on August 1.</p>

South Korea races to secure US tariff deal before August 1 deadline