More Than Tariffs: Seoul’s Trade Talks with Washington Amid a Power Vacuum
On April 8, just days after announcing his “Liberation Day” tariffs, U.S. President Donald Trump is said to have surprised South Korean Acting President Han Duck-soo during their first phone call with an unexpected question: “Are you running for president?” Han, who had just returned to office in late March after surviving an impeachment trial over his alleged complicity or acquiescence in President Yoon Suk-yeol’s martial law declaration, reportedly replied that no decision has been made. Since then, however, Han has emerged as a potential candidate from the conservative camp, backed largely by supporters of the ousted Yoon, many of whom are strongly aligned with the U.S. and critical of China on foreign policy. His possible run has drawn sharp criticism from the left, arguing that Han is using trade talks with Washington as a political springboard and rushing the talks at the risk of making significant concessions. Against this backdrop, at the request of the U.S., South Korea’s finance and trade ministers met with their American counterparts in Washington, further deepening concerns over the acting government’s legitimacy to negotiate.
First 2+2 Meeting
Since Trump slapped tariffs on U.S. allies and partners, a test of nerves and strategy has unfolded, with the experience varying by country. South Korea, caught in a political vacuum, could not respond quickly, but incidentally bought itself a little time to watch how others fared. Neighboring Japan, on the other hand, was the first to fly to Washington and test the waters – an experience South Korea closely studied ahead of its own meeting with Washington. Seoul assembled a team of over 50 officials from eight relevant ministries, with particular attention to the non-tariff barriers that had featured prominently in Tokyo’s talks. The trade consultation was held in a 2+2 format – bringing together U.S. Treasury Secretary Scott Bessent and Trade Representative Jamison Greer with Korea’s Finance Minister Choi Sang-mok and Trade, Industry and Energy (MOTIE) Minister Ahn Duk-geun – and lasted a little over an hour.
In the meeting, the Korean delegation presented Seoul’s “willingness to cooperate on key U.S. interests, such as trade and investment, shipbuilding, and energy,” and added that it “placed particular emphasis on addressing U.S. auto sector tariffs,” given their substantial negative impact on the Korean economy. One major outcome of the 2+2 meeting, according to Choi at the post-talks press briefing, was the agreement to put together a “July package” by July 8, when the Trump administration’s 90-day suspension of reciprocal tariffs is set to expire. Choi explained that the package aims to eliminate the tariffs. He also noted that the two sides outlined the scope of future discussions, identifying four focus areas: tariff and non-tariff measures, economic security, investment cooperation, and currency policy. Additionally, Choi said the delegation explained that future talks would need to account for factors such as South Korea’s political schedule, trade-related legislation, and cooperation with the National Assembly, and asked for U.S. understanding.
Later that afternoon, USTR Greer and MOTIE Minister Ahn held a separate bilateral meeting, during which Ahn reiterated Seoul’s request for a full exemption from all U.S. tariffs, including the 25 percent reciprocal tariffs, additional 25 percent tariffs on automobiles and steel, and any future tariffs. At the briefing, Ahn said, “both sides agreed to hold working-level consultations on tariffs next week.” At the Q&A session following the briefing, he confirmed that non-tariff barriers, such as digital trade issues, were discussed, but KORUS Free Trade Agreement (FTA) renegotiations were not. On the timeline, Ahn commented, “as the entire package needs to be agreed upon, it is difficult to draw any conclusions about the U.S. tariffs based on the early resolution of just one or two issues,” suggesting that reaching a full agreement before South Korea’s presidential election on June 3 remains uncertain.
The “Legitimacy” Question
Yet, what stirred tensions in Seoul – particularly among the left – were Secretary Bessent’s comments immediately following his meeting with the Korean counterparts, hinting at an “agreement of understanding” on trade “as early as next week.” Noting that the Korean delegation had come early, he said, “We may be moving faster than I thought,” and added, “they [Koreans] came with their A game, and we will see if they follow through.” Adding to the unease, President Trump said in an interview with TIME magazine, released just a day after the talks, that the U.S. would be finalizing trade deals “over the next three to four weeks.” These remarks from the U.S. leaders directly contradicted what the Korean delegation had shared in its briefing – an inconsistency that, if true, would accelerate pressure on a country under interim leadership to swiftly clarify its position.
South Korea’s main progressive party, the Democratic Party of Korea (DPK), which holds a majority in the National Assembly, quickly criticized the talks, firmly asserting that major negotiations, such as those over tariffs, should be handled by the next administration. It also urged Acting President Han to halt negotiations with the U.S. and immediately step down. Citing Bessent’s “A game” comment in particular, the party’s chief spokesperson questioned, “What on earth did they [Korean delegation] bring to prompt such a reaction from the U.S.?” Nonetheless, in an interview with the Financial Times, Han made it clear that “there is no distinction between what acting presidents or elected presidents can do.” Unsurprisingly, DPK leadership has demanded full disclosure of the Washington talks.
Even before the talks began, concerns were already mounting over Han’s interviews with the foreign press, in which he stated that South Korea “will not fight back” against U.S. tariffs as it owes historical debt to the U.S. – remarks some viewed as going beyond diplomatic courtesy and undermining Korea’s negotiating leverage. When asked earlier whether Seoul might cooperate with Japan or China to resist the tariffs, he responded, “We will not take that route.” The perception of Han’s early willingness to concede, coupled with questions about his legitimacy to negotiate, was met with skepticism, particularity from progressives at home. At the same time, it is also possible to presume that Han – a veteran government official who spent decades representing Korea in foreign and trade policy – intentionally made those comments in English to signal Washington that, unlike other friends, such as Canada, Mexico, and the EU, who all hinted at retaliatory measures, South Korea would take a more conciliatory approach in hopes of securing exemptions from the Trump administration.
Given the context, it is noteworthy that the Trump administration deliberately chose to engage with Seoul’s acting government. Facing an imminent change in leadership, Washington likely saw the fragile political climate as an opportunity to maximize its negotiating leverage. Any concessions secured now, whether large or small, could later be used to pressure the next Korean administration by pointing to agreements made by its predecessor. In short, Washington viewed this as the ideal moment to launch negotiations with Seoul before a new government – highly likely to be led by DPK presidential candidate and frontrunner Lee Jae-myung – takes office.
In response to Trump’s earlier tariffs against Canada, Mexico and China, DPK under Lee’s leadership, proposed to establish a special committee on trade within the National Assembly. Lee argued that the U.S. tariffs dealt a direct blow to Korean companies operating factories in those countries, and that, in times of government crisis, the National Assembly must find ways to protect Korean businesses and serve the national interest. He renewed his call, after Seoul was hit with the 25 percent “Liberation Day” tariffs, claiming, “If the government fails to respond to Washington’s America First trade policies, then the National Assembly must step up.”
South Korea’s Struggle with Time
As China remains largely unfazed by U.S. tariffs and presses ahead with retaliation, an increasingly impatient Trump faces growing pressure to secure early wins by striking deals with more pliable counterparts. Reflecting this urgency, Secretary Bessent has reportedly placed five countries – UK, Australia, India, Japan and South Korea – at the top of his target list for trade deals, signaling “first mover advantage” to entice early engagement. Considering the circumstances, it is undeniable that South Korea, the only country on the list currently led by an acting government, finds itself in a uniquely vulnerable position, one that Washington seems ready to capitalize on.
A pressing issue – and one that Seoul will likely find it difficult to hold off on – is the Alaska LNG project. On the same day U.S. and Korean finance and trade leaders met, The New York Times broke the news that Washington is “urging Japan and South Korea to make a formal commitment within the next few weeks” to the $44 billion project, shipping liquefied natural gas from Alaska to Asia. President Trump’s National Energy Dominance Council is reportedly pushing for trade ministers from both countries to attend a summit in Alaska on June 2 – just one day prior to South Korea’s presidential election – effectively forcing Seoul to commit before a new government is elected. While Minister Ahn, in his response to the question about the Alaska project during the Q&A session, said that Seoul plans to make a decision only after thoroughly reviewing the project’s feasibility, the accelerating U.S. timeline is clearly leaving Seoul little room for delay. Taiwan, meanwhile, signed on with the project last month.
Although Minister Choi clarified that the issue of defense cost-sharing did not come up this time – unlike with Japan, where President Trump made a surprise appearance and abruptly demanded more from Tokyo – Trump, in his TIME interview, referenced Korea as an example and said that he plans to keep “paying for the military” as “a separate item.” This marks a sharp turn from his earlier statement about “one stop shopping,” where he suggested covering military costs along with trade and tariffs. With Seoul and Washington preparing for the Korea-U.S. Integrated Defense Dialogue – the first round of regular defense talks under Trump 2.0 – in Washington this week, the issue could resurface. The two countries did sign a defense cost-sharing agreement, the Special Measures Agreement (SMA), last year ahead of the U.S. election, which remains valid until 2030. However, just as the tariffs were imposed in the face of the existing KORUS FTA, the SMA may not fully shield Seoul from renewed U.S. demands.
June Presidential Election in Seoul
Amidst the difficulty of negotiating trade with South Korea’s sole ally and the world’s most powerful country during a political vacuum, China’s warning against siding with Washington against Beijing on trade only deepens the complications for Seoul. Challenged from within, the acting government’s lack of political support leaves it struggling to justify any moves vis-à-vis Washington. With just about five weeks left until the presidential election, DPK candidate Lee said in a televised debate that while strengthening the U.S.-Korea alliance and enhancing trilateral cooperation with the U.S. and Japan are important, “we [Korea] cannot allow ourselves to be unilaterally bound.” He added, “Relations with major powers or countries with special ties, such as China, Russia, and North Korea, must not be indiscriminately antagonized but managed appropriately” – signaling a less accommodating approach toward Washington.
The situation is now further complicated by Acting President Han’s potential presidential bid, which is likely to face strong condemnation from the left. Yet Seoul cannot afford to sit idle either, especially as the Trump administration steps up demands for quick concessions in return for a possible reduction or removal of its tariffs. Ahead of the June election, a major trade event hosted by South Korea next month – the Asia-Pacific Economic Cooperation trade ministers’ meeting, which USTR Greer has noted his attendance – will open another front for U.S.-South Korea trade talks, further contesting the acting government’s fragile standing. Just this week, Donald Trump Jr.’s visit to Seoul – and the nation’s top business leaders lining up to meet him while the government’s authority remains politically precarious – already underscores the escalating instability surrounding South Korea.
Despite the Korean delegation’s claim that the Washington talks were merely a “consultation” – an opportunity to identify and exchange mutual interests, not “negotiations” that would require National Assembly involvement – the starting pistol has been fired, and working-level teams have kicked off technical discussions. With external strains intensifying and internal divisions unresolved, the country has reached a point unable to move forward or retreat. Uncertainty continues to grow, and Seoul’s trade talks with Washington are looming larger than ever as the election nears.