South Korea’s acting President calls for talks with US over tariffs
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South Korean Acting President Han Duck-soo will preside over a meeting with the private sector to discuss responses to the US tariffs.
PHOTO: REUTERS
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SEOUL – South Korea’s acting President Han Duck-soo called on April 3 for talks with US officials to shield the export-reliant economy from the impact of US tariffs and ordered emergency support measures for businesses.
US President Donald Trump has unveiled global reciprocal tariffs that include a 25 per cent rate on South Korea,
After the tariff announcement, South Korean officials signalled they were seeking to negotiate, rather than retaliate.
Mr Han asked the Industry Minister to analyse the content of the tariffs and actively negotiate with Washington to minimise the impact of US reciprocal tariffs, an industry ministry statement said.
“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis,” Mr Han said at a meeting with the Finance Minister and other top officials, according to the Industry Ministry.
Industry Minister Ahn Duk-geun called the new tariffs “regrettable” but said Seoul will keep consulting with both senior and working-level US officials on tariffs.
Mr Trump in his speech singled out Washington’s Asian security allies South Korea and Japan, accusing them of being among the worst offenders for conducting unfair trade practices against the United States.
Analysts in Seoul said Mr Trump’s extensive rollout of tariffs would inflict a significant blow on Asia’s fourth-largest economy.
“It is clear that major export products such as automobiles will be hit hard, and exports to the US through production bases in Vietnam will also be hit hard,” Mr Park Sang-hyun, an economist at iM Securities, said in a note.
Mr Trump also said he will slap a 46 per cent duty on imports from Vietnam.
South Korea’s major corporations such as Samsung Electronics and LG Electronics have manufacturing bases in the South-east Asian country.
Citi estimated the new tariffs could shave 0.16 per cent from South Korea’s GDP in 2025, putting its 1 per cent economic growth forecast at risk.
‘No captain on a boat in typhoon’
Top government officials met South Korean business executives on April 3 to discuss the tariffs.
Mr Lee Yong-ho, chief executive of AIT, a company exporting aluminium automobile parts to the US, said AIT was already being squeezed by additional costs since a 25 per cent tariff on aluminium products
“We’re like let’s hold it out for now, but if it continues any longer, we’re looking at a hopeless situation,” said Mr Lee, who feared losing his American clients to local rivals if he tried to raise product prices.
The benchmark Kospi stock index closed down 0.77per cent, narrowing earlier losses on hopes officials will be able to lower the rate in negotiations.
Acting President Han said the government would prepare support plans for the auto industry by next week.
South Korea is likely to make concessions to the Trump administration by importing more US products, ING said in a report, adding they might include gas and oil, or increased military spending.
Together with Mr Trump, Hyundai Motor Group recently announced a US$21 billion US investment.
The efforts to tackle the tariffs come as South Korea deals with a leadership vacuum.
The Constitutional Court is due to rule on April 4 whether to permanently remove or reinstate President Yoon Suk Yeol after he was impeached over his short-lived move to impose martial law in February.
Mr Lee, the auto parts supplier, likened South Korea’s situation with tariffs to a ship trying to navigate a typhoon without a skipper.
“Our ship has no captain,” he said, in reference to the political uncertainty.
Before Mr Trump’s announcement on reciprocal tariffs, South Korean officials had sought exemptions, arguing the country had almost zero tariffs in place under a comprehensive free trade pact with the US.
“It is assessed to have practically nullified the Korea-US Free Trade Agreement,” said Mr Paik Seok-hyun, an economist at Shinhan Bank, referring to Mr Trump’s new tariffs.
A Finance Ministry official told Reuters that the information available so far suggested the 25 per cent tariff rate took precedence over the free trade pact, and the government is actively seeking negotiations with the US to lower it.
Another government official, who requested anonymity, said South Korea was not in a position to counter US tariffs aggressively under current security environments and must try to negotiate with Washington. REUTERS
