U.S. to Reinstate Reciprocal Tariff Rates After July 8; South Korea Likely to Face 25%

Pushing for Negotiations Ahead of Grace Period Expiry

Base Tariff of 10% Plus Additional Country-Specific Tariffs

Trump: "Tariffs Could Be Raised Up to 70%"

Scott Besant, the U.S. Secretary of the Treasury, stated that countries failing to reach a trade agreement with the United States by July 8, the deadline for reciprocal tariff negotiations, will have the originally imposed reciprocal tariffs applied. U.S. President Donald Trump further mentioned the possibility of imposing maximum tariffs as high as 70%, far exceeding the originally announced rates.

In a CNBC interview on the 3rd (local time), Secretary Besant said, "We are still negotiating, and all countries are waiting until the very last moment. They believe they can get the best deal," he said. "But these countries should be cautious. We could revert to the figures set on April 2, when the reciprocal tariffs were announced," he warned. This means that countries not reaching a trade agreement with the U.S. by the 8th will be subject to the previously announced reciprocal tariffs without exception.

The Trump administration, after imposing reciprocal tariffs on many countries in April, postponed their implementation by 90 days through July 8, during which only a basic tariff of 10% would be charged. South Korea is currently subject to the 10% base tariff. However, after July 8, tariffs are set to revert to the originally announced levels. It is forecast that South Korea will face a 25% tariff (consisting of the 10% base tariff plus a 15% country-specific tariff).

However, in an interview with Bloomberg TV, Secretary Besant claimed that about 100 countries will be subject to the 10% tariff rate. Nearly half of the roughly 200 U.S. trade partners will continue to face a basic 10% tariff rate.

The Trump administration is urging other countries to quickly conclude tariff negotiations. President Trump said, "We plan to send (tariff rate notification) letters to ten countries a day, and the process will be completed by the 9th." He added that tariffs will go into effect on August 1. When asked which countries will receive the tariff notification letters first, he answered, "On the 4th, it will be 10 to 12 countries."

There is also a possibility that tariff rates could be raised even further above the levels announced in April. President Trump stated, "Tariffs could range from 10% or 20% up to 60% or 70%." The highest reciprocal tariff applied to different countries in April was 50%, but a 70% tariff is now being considered. This move is interpreted as a way to pressure countries to conclude negotiations quickly.

A sense of urgency has struck South Korea, which began its trade negotiations with the United States later due to a change in administration. Han-Koo Yeo, Director-General for Trade Negotiations at the Ministry of Trade, Industry, and Energy, is heading to Washington, D.C. on the night of the 4th for negotiations. He is scheduled to meet Jamieson Greer of the United States Trade Representative (USTR) and Secretary of Commerce Howard Lutnick on the 5th and 6th.

Director-General Yeo stated at the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee that "depending on the progress of the negotiations, we will proactively consider a further extension of the reciprocal tariff grace period if necessary." South Korea's plan is to negotiate exemptions for the reciprocal tariffs imposed by the U.S. on items such as automobiles, steel, and aluminum, at least so that its situation will not be disadvantageous compared to competing countries.

Reporter: Da-yeon Lim allopen@hankyung.com