Senior official of South Korean Ministry of Industry: It is impossible to reach a trade agreement with the United States before the presidential election in June.

Following the conclusion of the US-Korea "2+2" high-level trade consultations, a senior official from South Korea's Ministry of Trade, Industry and Energy admitted on April 28 that reaching an agreement with the United States before the presidential election on June 3 is nearly impossible, even if the deadline is extended to early July, it would still be "extremely difficult."

According to Reuters, Park Sung-tae, the first deputy minister of the Ministry of Trade, Industry and Energy, told the media on the 28th that "theoretically, it is impossible for South Korea and the United States to reach a comprehensive trade agreement by the end of May or early June."

Park Sung-tae added, "In recent talks, we have fully explained our political situation to the U.S. side. The U.S. also understands that South Korea's special political situation may become a limiting factor in the negotiations."

Previously, South Korea's Constitutional Court announced on April 4 the impeachment of Yoon Suk-yeol, who was immediately removed from his position as president. Additionally, Yoon is facing charges of "allegedly instigating a rebellion." The Seoul Central District Court held hearings on the case of Yoon allegedly instigating a rebellion on the 14th and 21st respectively. The trial is still ongoing, and South Korean media reports suggest he could face life imprisonment.

South Korean media pointed out that South Korea will hold a presidential election on June 3 to select a new president. If the tariff negotiations yield results, it might benefit the ruling People Power Party's campaign, but the main opposition Democratic Party opposes hasty tariff negotiations. These political changes undoubtedly add more uncertainty to the negotiations.

Political analysts also told Reuters that it is difficult for South Korea, currently led by Acting President Han Duck-soo, to make firm commitments on large-scale energy projects and defense spending. "Frankly speaking, I believe that achieving some results within the next 70 days, despite President Trump's expectations, will be very challenging," said Park Sung-tae.

Park Sung-tae also revealed that South Korea has requested the U.S. to exempt "reciprocal tariffs" and tariffs on automobiles, steel, and other products, and proposed cooperation in shipbuilding, energy, and addressing trade imbalances. Park stated that South Korea is discussing sending a working group to Alaska, USA, to review the feasibility of a $44 billion liquefied natural gas project, and the U.S. hopes to fund its gas projects through investments from South Korea and Japan.

On local time April 9, 2025, cars waiting for export at the port of Pyeongtaek, central west coast of South Korea. IC Photo.

South Korea held the "2+2" high-level trade consultations with the United States in Washington on April 24. Attendees included Minister of Trade, Industry and Energy of South Korea, An De-gyun, Deputy Prime Minister and Minister of Economy and Finance of South Korea, Choi Sang-moo, U.S. Treasury Secretary Scott Beasley, and U.S. Trade Representative Jamison Greer.

Choi Sang-moo stated after the meeting that both sides discussed the revocation of tariffs before the end of the 90-day "reciprocal tariff" moratorium (July 8), and agreed to strive for an economic and trade package agreement by early July. Both countries will not rush into decisions but proceed in a calm and orderly manner.

The two sides agreed to further discuss four major areas, including tariffs and non-tariff measures, economic security, investment cooperation, and foreign exchange policies. Among these, "economic security" has drawn significant attention as it covers a wide range of content including economy, politics, and diplomacy. According to The Korea Times, industry insiders speculate that the negotiations may involve semiconductors, batteries, supply chain cooperation, and export control strategies targeting China.

Yonhap News Agency reported that South Korea is one of the hardest-hit countries by these tariffs. Semiconductors are the cornerstone of South Korea's export-oriented economy, accounting for 20.8% of total exports in 2024, far exceeding traditional advantageous products such as automobiles, ships, petrochemicals, and communication equipment. Automobiles are South Korea's largest export category to the U.S., with a total export value of $34.74 billion (approximately 252.8 billion yuan RMB) in 2024, accounting for 49.1% of overall automobile exports.

These two important export industries have been impacted by dramatic changes in the international trade environment, directly affecting South Korea's export economy. The International Monetary Fund has significantly downgraded South Korea's growth forecast from 2.0% to 1.0%, and institutions such as JPMorgan Chase and Citigroup have also revised their growth forecasts for South Korea downward.

Data released earlier by South Korea's customs authority showed that South Korea's external exports declined by 5.2% year-on-year in the first 20 days of April (adjusted for workdays), forming a sharp contrast with the 5.5% growth in March. On a macro level, data released by South Korea's central bank showed that South Korea's GDP contracted by 0.1% year-on-year in the first quarter of 2025, falling short of market expectations for a flat performance, while the previous quarter had grown by 1.2%.

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