Stalemate in South Korea-US tariff talks

South Korea-US talks on tariffs and Korea's massive investment plan in the US have reached a deadlock. Ko Yeon-chul, South Korea's deputy prime minister and finance minister, is set to travel to the US on Wednesday (October 13) to meet with US Treasury Secretary Basnet.

After the two countries reached a preliminary framework in late July this year, Seoul proposed an investment plan worth US$350 billion.

In return for these concessions, South Korea expected Washington to reduce the "reciprocal" tariff rate on Korean goods from 25% to 15%. However, key details, such as the financing structure, profit sharing, and allocation of investment resources, have not yet been agreed upon, and the final signing of the agreement has been postponed.

South Korea submitted a revised investment memorandum of understanding to the US side earlier this month, calling for “unlimited currency swaps” as one of the main conditions for reaching a final agreement.

Earlier, South Korea’s Minister of Trade, Industry, and Energy Kim Jong-kwan met with US Commerce Secretary Lutnick in New York. He said after returning to Seoul that the two sides had reached an understanding on currency market sensitivities and were working to reduce remaining differences.

Next week’s bilateral financial meeting is reportedly seen as a key opportunity to revive the talks. International observers are watching to see if Ko Yeon-chul can make meaningful progress in his talks with US Treasury Secretary Steven Mnuchin on currency swaps and investment details.

If the talks continue without tangible progress, the two countries plan to continue consultations at the Asia-Pacific Economic Cooperation (APEC) Finance Ministers' Meeting and the Gyeongju Summit later this month.