US Proposes Currency Exchange Rate Talks... Pressuring for Won Appreciation?

Included in the Four Key Issues of Tariff Negotiations

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok announced on the 24th (local time) that "US Treasury Secretary Scott Besant proposed to discuss the currency exchange rate." Concerns are arising that the US government may demand the appreciation of the Korean won (decrease in the won-dollar exchange rate) as leverage in tariff negotiations.

Deputy Prime Minister Choi stated in a briefing on the results of the '2+2 Trade Talks' held in Washington DC, USA, that "the two countries have decided to hold separate working-level consultations regarding currency policy."

This proposal by the US Treasury is interpreted as an intention to make the currency exchange rate issue a major agenda in this trade consultation. Experts speculate that the US government may demand the appreciation of the won, claiming that "the weak won is causing the US trade deficit." This aligns with the report titled 'A User's Guide to Reconstructing the Global Trade System' written by Stephen Miran, then a strategist at Hudson Bay Capital, in November last year. The report suggested that the value of the dollar should be depreciated to strengthen US manufacturing competitiveness. Subsequently, Miran was appointed as the Chairman of the White House Council of Economic Advisers.

There are also many forecasts that the US will use the upcoming currency report announcement next week as leverage in tariff negotiations. In the currency report released last November, the US government designated Korea as a 'monitoring country.'

Reporter Kim Ik-hwan lovepen@hankyung.com