U.S. President Donald Trump and President Lee Jae-myung reached a sudden agreement on tariff negotiations on the 29th, allowing Korea's struggling industrial sector to breathe a sigh of relief. Experts said, "This is where the real work begins," and noted that "investment in the United States must be tied to Korea's future industrial innovation through consolidation."
According to the presidential office and the Ministry of Trade, Industry and Energy on the 30th, the two leaders reached a sudden agreement the previous day in Gyeongju on the follow-up talks to the tariff negotiations. The deal centers on the Korean government investing $200 billion in cash out of a $350 billion investment package for the United States, while capping annual investment at $20 billion. In return, the United States agreed to lower the reciprocal tariff on Korean products and the tariff on automobile items from 25% to 15%, respectively.
Experts assess that the negotiations are a meaningful achievement in that they reduce uncertainty and ease the Trump administration's demand for "all-cash investment." Choi Seok-young, head of the International Trade Institute at Lee & Ko (former ambassador to Geneva), said, "A final assessment will be possible when the details of the memorandum of understanding (MOU) are finalized, but the fact that the deadlock between Korea and the United States was broken and tariff cuts were achieved is positive." Choi Yong-min, former head of the Institute for International Trade and Commerce at the Korea International Trade Association, also said, "Adjusting from all cash to $200 billion in cash investment is highly meaningful in terms of bargaining power."
Although the tariff negotiations were concluded abruptly, there are still many issues to resolve. First, in accordance with Article 60, Paragraph 1 of the Constitution, which states that "treaties that impose a significant financial burden on the state or the people must be ratified by the National Assembly," political controversy is likely. If the ruling and opposition parties clash over the details of the Korea-U.S. negotiations, it could take considerable time for the agreement to take effect. In addition, the issue of stably securing $200 billion in investment funding over 10 years remains a burden for the government.
There are also calls for careful attention to the detailed provisions of the MOU to be concluded in the future. As in Japan's trade negotiation cases, it cannot be ruled out that clauses not included at the time of the announcement may be added to the final document. Choi Seok-young, head of the International Trade Institute at Lee & Ko (former ambassador to Geneva), said, "Right after the U.S.-Japan negotiations, the two countries offered conflicting interpretations, but many U.S. demands were reflected in the final MOU," adding, "It is difficult to see this negotiation as concluded based on a verbal agreement alone this time as well."
Experts agreed that the agreement should not be limited to simple tariff negotiations but should be developed into an investment model with profitability and sustainability. Heo Yoon, a professor at the Graduate School of International Studies at Sogang University, said, "The government should establish a consultative body and a monitoring system that can fully reflect the opinions of corporations," and advised, "It should prepare a model that secures a long-term revenue structure, not just short-term investment."
There were also suggestions to use this as an opportunity for security and future-industry cooperation between Korea and the United States. It was noted that cooperation should be expanded beyond shipbuilding and automobiles to defense and advanced technology.
Choi Yong-min, former head of the Institute for International Trade and Commerce at the Korea International Trade Association, said, "Korea's investment in the United States should expand into joint research and development (R&D) in quantum mechanics and artificial intelligence (AI)," and added, "We should build a 'win-win cooperation model' that actively leverages U.S. technology and human resources to take Korea's industrial competitiveness up a notch."
Lee Bu-hyeong, a director at the Hyundai Research Institute, emphasized, "We should not stop at individual projects such as nuclear submarine construction; cooperation in basic science must be strengthened to enhance overall applicability and potential across industry." Lee added, "Without the active participation of private corporations, concluding the tariff negotiations would also have been difficult," and said, "The government should continue policy support to back corporations' efforts."