South Korea trade minister may seek extension to tariff freeze in US talks

SEOUL: South Korea's Trade Minister Yeo Han-koo said on Friday (Jul 4) that he might request an extension of the freeze on US tariffs that is set to expire within days when he heads to Washington for talks with US officials.

Yeo, who became South Korea's new trade envoy last month, is due to fly to the US on Friday and plans to hold talks with US Trade Representative Jamieson Greer and other senior officials on Saturday, just ahead of the Jul 9 deadline when US tariffs could rise sharply.

US President Donald Trump said his administration would start sending letters on Friday to countries specifying what tariff rates they will face on imports into the United States.

Yeo said the substance of negotiations mattered more than the deadline, noting he would ask the US to take time and accelerate talks to reach a "win-win" deal.

South Korea has sought exemptions from Trump's punishing tariffs on imports of automobiles and steel products, as well as a 25 per cent "reciprocal" levy on the Asian ally currently paused for negotiations.

The government of Asia's fourth-largest economy, which is currently subject to a blanket 10 per cent tariff, agreed with the US in their opening round of trade talks in late April to craft a trade deal reducing tariffs by the July deadline.

However, negotiations appear to have made little progress and were hampered by political uncertainty over the last few months following South Korea's martial law crisis with President Lee Jae Myung elected as the new leader on Jun 3.

President Lee said on Thursday that the ongoing talks between Seoul and its ally Washington had "not been easy", adding the two sides were not clear on what they want.

Washington is demanding better access to the agriculture and car sectors, and improved market access and non-discriminatory treatment in the digital sector, Minister Yeo told a parliamentary hearing on Friday.

"The government will respond flexibly by taking into account the level of the US demands and domestic political security sensitivities," Yeo said.

Yeo also said that the United States was asking for larger investments by South Korean companies in the country and increased South Korean purchases of US energy supplies.

Although South Korea has shown interest in a US$44 billion LNG project in Alaska, Yeo said the feasibility of the project was still not clear and the US would only provide more information later in the year.

At the hearing with Yeo, lawmakers from the ruling and opposition parties called for the government to make a careful assessment on whether to invest in the Alaska project or not.

"Once (we're) in the wrong place, it is hard to get out," said Lee Chul-gyu, a lawmaker from the opposition People Power Party.

South Korea's efforts to reach a trade deal come as Trump said Vietnam and the United States had agreed on a 20 per cent tariff rate on imports from Vietnam, down from an initial 46 per cent rate he threatened.

Yeo said South Korean companies that use the Southeast Asian country as a manufacturing base would be affected by those tariffs.

South Korean companies such as Samsung Electronics have poured billions of dollars into expanding their operations in Vietnam.