"Decision-Making Authority Transferred to Korea's Next Administration"
Through the first official consultation, the "Korea-U.S. 2+2 Trade Consultation," which discussed ways to address U.S. tariff policy, the Korean government has secured time for the next administration to reach a final agreement. Specifically, Korea has gained an extra month to decide on the "July Package," which was initially scheduled to be finalized by July 8, the expiration date of the mutual tariff suspension with the U.S. As a result, the final decision will be made by the next administration.
On April 25, Kang Insu, a professor at Sookmyung Women's University, told Asia Economy, "As expected, this consultation was meaningful in that Korea listened carefully to U.S. demands, explained its own position, narrowed down the issues for negotiation, and established a follow-up schedule," adding, "Korea has now secured both the time and the foundation for the next administration to engage in full-scale negotiations for the July Package."
On the 24th (local time), in the Treasury Department meeting room in Washington D.C., USA, An Deokgeun, Minister of Trade, Industry and Energy (from the left), Choi Sangmok, Deputy Prime Minister and Minister of Economy and Finance, Scott Bessent, U.S. Secretary of the Treasury, and Jamison Greer, U.S. Trade Representative, attended the "Korea-U.S. 2+2 Trade Consultation" and took a commemorative photo.
On the morning of April 24 (local time) in Washington D.C., Choi Sangmok, Deputy Prime Minister and Minister of Economy and Finance, and An Deokgeun, Minister of Trade, Industry and Energy, held a 2+2 Trade Consultation with Scott Bessent, U.S. Secretary of the Treasury, and Jamison Greer, U.S. Trade Representative (USTR). At this meeting, the Korean government formally requested the abolition of tariffs not only on mutual tariffs but also on key items such as automobiles and steel. However, instead of reaching a concrete agreement on these issues, both sides established a framework for future negotiations, including the subjects and schedule to be discussed.
Deputy Prime Minister Choi stated in a briefing on the outcome of the Korea-U.S. trade consultation, "Through today's 2+2 meeting, which marks the starting point of Korea-U.S. negotiations, we have narrowed the issues for discussion and reached a consensus on the negotiation schedule, thereby establishing the 'basic framework for consultation.' We agreed to prepare a July Package by July 8, when the mutual tariff suspension ends, with the goal of abolishing tariffs. Both sides also formed a consensus to focus discussions on four key areas: tariffs and non-tariff measures, economic security, investment cooperation, and exchange rates (monetary policy), which are of mutual interest."
Within industry circles, there is an interpretation that this outcome represents a "transfer of decision-making authority." Given the political calendar ahead of the presidential election and the fact that the current administration is nearing the end of its term, it is realistically difficult for the outgoing government to unilaterally pursue major trade decisions. As such, the structure and framework of the negotiations have been established, but the substantive agreement will be left to the next administration. In fact, sensitive issues between the two countries, such as defense cost-sharing and renegotiation of the Free Trade Agreement (FTA), were not addressed. Deputy Prime Minister Choi also explained, "I told the U.S. side that future Korea-U.S. discussions should take into account Korea's political schedule, including the presidential election, and the U.S. side agreed that such considerations are necessary."
The term "July Package" ostensibly means "to consult before the expiration of the suspension," but in essence, it is structured to provide the next Korean president with the space to make a final decision based on the legitimacy of the new administration and coordination with the National Assembly. Fortunately, there is about a month between the launch of the next administration in early June and the expiration of the mutual tariff suspension on July 8, giving the next government ample time to reach an agreement with the U.S. The current administration is laying as much groundwork for negotiations as possible before the next government takes office, but the final decision is designed to be made by the incoming administration. The U.S. also appears to be taking these circumstances into account. With the Trump administration strengthening its protectionist stance, it has withheld a clear position on Korea, seemingly intending to broaden its options depending on the outcome of Korea's presidential election and the trade policy direction of the next administration.
There is also analysis that this consultation is not merely a "handover." The current administration is not just buying time in the short term but is also preparing in earnest with Korea's national interest in mind. By setting the clear goal of eliminating tariffs recently imposed by the U.S. and repeatedly communicating Korea's position to the U.S. side, there remains the possibility of making substantive progress in future negotiations based on this groundwork.
Some predict that "exchange cards," including certain concessions, could play a key role in the July Package. For example, in areas where the U.S. needs strategic partners, such as the Alaska LNG project, Korea is pursuing a strategy of encouraging the U.S. to lift tariffs by offering a certain level of cooperation. Cooperation in shipbuilding, expanded investment by Korean companies in the U.S., and increased LNG imports are all considered to be politically acceptable domestically, regardless of which administration is in power.
Professor Kang stated, "Although the final negotiations have been postponed to July, even before then, Korea must reduce tariffs on items like automobiles, which are inevitably impacted, and President Donald Trump also needs to achieve visible results through tariff measures. It is possible for the current administration to address at least some of the non-tariff barriers pointed out by the U.S., as well as to expand LNG imports and encourage Korean companies to invest, so these efforts should be actively pursued."
For the government, it is especially important to refer to the responses of Japan, Taiwan, and the European Union (EU) and seek the most favorable conditions. As U.S. trade pressure expands on all fronts, Korea must secure strategic space not just to "minimize damage" but to "take a proactive approach."
Kim Jeongsik, Professor Emeritus at Yonsei University’s Department of Economics, said, "I understand that there have been discussions about mutually exempting tariffs on certain items, such as auto parts. This is not a simple concession, but rather a structure in which both sides seek to negotiate for mutual benefit. Although ministers and other high-ranking officials will change after the presidential election, most of the working-level officials in charge of trade will remain, so as long as a clear direction is set now, the continuity of Korea-U.S. negotiations can be sufficiently ensured."
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