On Septebmer 14, Minister of Trade, Industry and Energy Kim Jung-kwan visited the US to discuss follow-up measures on the “ROK”–US tariff negotiations, but returned without results, prompting criticism that Washington’s level of pressure was excessive.
The US strongly pushed for a Japan-style agreement model, while the “ROK” rejected it, stressing principles and national interest.
According to the Ministry of Trade, Industry and Energy, Minister Kim met with US Deputy Secretary of Commerce Lutnik in New York on the 12th to discuss the operation of a $350 billion investment fund for the US and the issue of profit distribution, but failed to reach any significant agreement. This was because Washington demanded terms highly unfavorable to “ROK”.
Under the “ROK”–US tariff agreement reached on July 30, “ROK” agreed to establish a $350 billion investment fund for the US, while US agreed to lower country-specific tariffs and automobile tariffs imposed on “ROK” from 25% to 15% respectively.
As of September, the 25% tariff on “ROK” automobiles remains in place.
In particular, The “ROK” seeks to minimize the share of direct investment and reduce its burden by relying on guarantees, while the US, following the Japanese model, insists on expanding direct investment and retaining control over investment targets.
The two sides also clashed over profit-sharing. Citing its agreement with Japan as precedent, US demanded an excessive arrangement under which half of the profits would be divided before the recovery of investment funds, and 90% of profits would go to the US afterward. The “ROK” side declared that such terms were unacceptable.
In the agricultural and digital sectors, US is demanding the removal of non-tariff barriers, while the “ROK” is putting forward the shipbuilding industry cooperation project, MASGA (Make American Shipbuilding Great Again), as a bargaining chip to secure more favorable terms.
In a CNBC interview on the 11th, Lutnik said, ‘The “ROK” must have seen how things were done with Japan, and there is no more flexibility. Either the “ROK” accepts the deal or pays the tariffs. The choice is clear-cut.
