On April/2/2025 Donald Trump announced a minimum 10% tariff on all US imports effective by April/5/2025, and higher tariffs on imports from 57 countries (which also include South Korea) ranging from 11% to 50%, which where scheduled to take effect on April 9 but we’re almost immediately suspended for 90 days for all countries expect China.
Highly dependent on exports south Korea has been hit hard by the the 25% tariffs on automobiles. still, the chip sector of south Korea’s biggest export item, remained resilient as the new 10% tariff does not cover sectors such as energy, semiconductors and pharmaceuticals. However the administration said that tariffs on these sectors will be added later. The impact of higher tariffs has been reflected in recent economic forecasts. The Bank of Korea, which last November had projected real GDP growth of 1.9% in 2025, revised it's forecast in late February "economic growth is expected to slow down to 1.5% this year, falling significantly below the previous outlook, as both exports and domestic demand face increasing downward pressure due to the implementation of U. S tariff policy and heightened domestic political uncertainty".
To deal with this uncertainty South Korea is working on different strategies that can help South Korea's economy to survive for ex:- On May/16/2025 South Korea’s industry minister Ahn Duk-geun said “ Seoul would try to reach a deal with Washington on tariffs by the July deadline previously agreed. The two met in late April in Washington, where South Korea proposed a “July package” aimed at removing tariffs. The meeting between Ahn and Greer was held on the side-lines of a gathering of trade ministers from 21 members economies of the Asia-pacific economic cooperation (APEC) grouping in South Korea. “ The countries will hold technical consultation next week to proceed with tariffs negotiations and expect to have another ministerial meeting in June” Ahn said, after meeting with U. S trade representative Jamieson Greer. Seoul and Washington had said they would aim to craft a trade package on tariffs and economic cooperation by July/8/2025. The technical discussion next week are due to focus on tariff and non-tariff measures, economic security, investment cooperation and currency policy.
Along with this south Korea and Vietnam agreed to expand economic cooperation after a ministerial meeting on 14/4/25. South Korea’s industrial minister Ahn Duk-geun visited Vietnam as the two countries scrambled to negotiate a reduction of threatened U.S tariffs of 25% and 46% respectively. Korean companies are the biggest foreign investor in Vietnam, and the southeast Asian nation is south Korea’s no. 3 export destination. The two countries agreed on action plans to ensure they can meet an existing target to reach $150 billion in bilateral trade by 2030 and cooperate in the generation of nuclear energy and LNG power and investments in the textile and clothes industries, according to a statement from South Korea industry ministry. The agreement came during a meeting of Ahn and Vietnam’s trade minister Nguyen Hong Dien in Hanoi.
It has also been heard that south Korea, Japan & china held their first economic dialogue in five years on March 30 in an effort to promote regional trade and agreed on “ a smooth and effective implementation” of RCEP ( regional comprehensive economic partnership). The three countries also signalled interest in restarting talks on a free trade agreement.
South Korea was one of the first country to hold face- to-face talks with Washington, soon after Japan. U. S commerce secretary Howard Lutnick said he did not expect deals with the two Asian allies Japan and South Korea this much fast. With domestic political issues and tariffs year 2025 seems to be challenging for south Korea.
-Reported by Kanta Kumari
Intern at The Korean Academy
Korean news analysis and reporting
