What’s on the table for US-South Korea trade talks?

SEOUL - When a South Korean delegation meets US counterparts in Washington on April 24 for trade talks, they will face a wide range of potential agenda items.

US President Donald Trump has said he wants to hold “one-stop shopping” negotiations and has mentioned the trade balance, tariffs, shipbuilding, energy cooperation and military cost sharing as issues for discussion.

Here are some of the key issues that may be discussed during the South Korea-US trade talks.

Tariffs

South Korea faces looming reciprocal tariffs, which Mr Trump set at 25 per cent, as well as item-specific tariffs on products such as steel, cars and semiconductors.

It will likely seek to lower the reciprocal tariff rate to the baseline 10 per cent, but may struggle with the item-specific levies.

The US-Korea Free Trade Agreement has reduced bilateral tariffs to 0.79 per cent in 2024, but Washington could ask Seoul to lower remaining tariffs on US agricultural goods such as rice and fruit.

Mr Trump could also target some non-tariff barriers such as South Korean restrictions on genetically modified foods, quarantines for agriculture products, limits on beef and regulations on tech companies.

Energy

Mr Trump wants South Korea and other Asian partners to join a US$44 billion (S$57.7 billion) natural gas export project in Alaska.

The project aims to transport gas south from Alaska’s remote north via a 1,300km pipeline, to be shipped as liquefied natural gas to Japan, South Korea and Taiwan, bypassing the Panama Canal.

South Korea hosted the Alaska governor and energy officials for talks in March and officials are considering travelling soon to Alaska as part of working-level negotiations on the project.

Investment

South Korea could offer to expand production bases in the US via South Korean companies, including in the automotive, chip and battery sectors.

On March 24, Hyundai announced a US$20 billion investment for US-based car and car parts production till 2028.

The potential tariffs will likely boost back-end fabrication investment in the US, according to Citi’s semiconductor equity research team.

Purchases

Mr Trump and the US acting ambassador to Seoul, Mr Joseph Yun, have warned that South Korea must reduce its trade surplus with the US.

South Korea is a major buyer of American military exports, including warplanes, and could look to announce more deals.

It could also boost purchases of US-produced energy commodities, agricultural products and commercial airplanes. In March, Boeing and Korean Air touted an upcoming US$32.7 billion order for up to 50 wide-body airplanes, plus engines and maintenance.

Shipbuilding

South Korea has said cooperation with Washington in the shipbuilding sector is a “very important card” in negotiations.

The country’s shipyards are expected to potentially benefit from rising demand for tankers, particularly after Mr Trump restricted use of Chinese vessels.

South Korea also has contracts for servicing some US Navy ships.

Some experts have expressed scepticism, however, that South Korea has the capacity to capitalise on increasing orders.

Defence costs

South Korea hosts about 28,500 American troops as a legacy of the 1950 to 1953 Korean War. It relies on the US nuclear umbrella for protection against China, Russia and North Korea, and is seen as a key ally for projecting US military power.

Late in 2024, Seoul signed a new agreement under which it will pay around US$1.2 billion towards the upkeep of those US troops in 2026, up 8.3 per cent from 2025.

During the campaign, Mr Trump said South Korea should pay as much as US$10 billion a year, and has said such costs would be part of the negotiations. REUTERS