Departure Canceled, Return Empty-Handed...Failed to Even Sit at the Negotiating Table, Facing a 'Tariff Bomb'?

US Suddenly Cancels 2+2 Talks…South Korea Cornered

Unprecedented Postponement Notified an Hour Before Departure

Not Just a Delay, but Possibly a Pressure Tactic

Seemingly Deemed South Korea's Proposal 'Below Expectations'

Only a Week Left and No Progress Made

How About China and EU, Predicted the Worst?

Unexpected Rapid Progress…Wrapping Up

South Korea Pushed Down from Negotiation Priority

Worst Case: Slapped with 25% Tariff and Last-Minute Talks

South Korea's position has rapidly worsened in the tariff war that the United States is waging against its global trading partners. As major trading nations—following Japan, now including China and the European Union (EU)—are reportedly close to finalizing deals, South Korea has not even been able to lay out its final proposal to the US. There is growing concern that South Korea might be the only country to suddenly face both reciprocal tariffs and itemized tariffs ranging from 25% to 50% starting next month.

South Korea Dropped From US Priority

South Korea was quickly cornered after the US-Japan tariff negotiations concluded on the 22nd. As President Donald Trump and Prime Minister Shigeru Ishiba each described it as "the greatest achievement among all agreements so far" and "the lowest tariffs (15%) among major trade surplus countries," pressure on the Korean negotiation team mounted.

Negotiations between the US and China, and the US and EU—once headed toward the worst with threats of retaliatory tariffs—have also made rapid progress. On the 23rd (local time), the Financial Times (FT) reported that the EU and US are close to an agreement to lower mutual tariffs from 30% to 15%. There are also signs that an agreement with China is imminent. On the 28th and 29th, US Treasury Secretary Scott Besant will hold a third round of high-level trade talks in Stockholm, Sweden, with Chinese Vice Premier He Lifeng. President Trump also said the day before, "Trade talks with the EU are proceeding seriously, and negotiations with China are in the final stages."

South Korea appears to be pushed aside in priority. The US gave notice of postponement for the 'US-Korea 2+2 Economic Talks' just a day before, and National Security Office Director Wi Sung-rak, dispatched to the US, returned without meeting his negotiation counterpart, US Secretary of State and National Security Advisor Marco Rubio—heightening such concerns. Professor Kim Tae-hwang of International Trade at Myongji University analyzed, "Notifying a delay just an hour before the finance minister's departure for intergovernmental talks is a pressure tactic targeted at South Korea."

Considering Secretary Besant’s visit to Stockholm, it is widely expected that it would be difficult to hold the US-Korea 2+2 talks before the August 1 deadline. Contrary to the Ministry of Strategy and Finance's explanation of "personal reasons for Secretary Besant," trade experts weigh the likelihood that the Korean government's proposals fell short of US expectations.

Regarding further agriculture market opening, the Korean government has displayed a defensive stance—declaring even before negotiations begin that 'rice and beef are not up for discussion.'

At Least Delay the Timing of Tariff Imposition

There is skepticism among industry experts that it will be difficult—not just to lower Korea's pre-announced tariff rate from 25% to match Japan's level (15%) but even to bring it down to 20%. Some suggest looking to Japan's recent example of focusing on key personnel. According to Japanese media, the Japanese negotiating team pinpointed a rivalry among Secretary Besant, Secretary of Commerce Howard Lutnick, and US Trade Representative (USTR) Jamison Greer, and focused their efforts on Lutnick. As a result, Yomiuri Shimbun reported that on the day before the US-Japan meeting, Lutnick showed favorable intent by inviting the Japanese team to his home for rehearsal.

The best-case scenario now is for Minister of Trade, Industry, and Energy Kim Jung-kwan and Deputy Minister for Trade Negotiations Yeo Han-gu—the Korean officials scheduled to meet with US trade authorities such as Lutnick and Greer—to successfully conclude Korea-US tariff negotiations by August 1. If both countries' trade authorities still cannot find a consensus, there are calls to at least delay the timing of tariff imposition by holding the US responsible for the postponement of the 2+2 talks. Secretary Besant stated, "Depending on the situation, the imposition of tariffs on certain countries could be postponed to September 1."

Reporters: Jung Young-hyo, Kim Ri-an, Ha Ji-eun hugh@hankyung.com