'Summit, Liberation Day Pardons, Major Shareholder Capital Gains Tax' - Key Challenges Facing President Lee After Vacation

Five-Day Vacation Until the 8th... Returning to Work Over the Weekend, Expected to Receive Briefings from Aides
Diplomatic Initiatives Begin with South Korea-Vietnam Summit
Decision on Pardons for Politicians Including Former Party Leader Cho Kuk at Cabinet Meeting on the 12th... Final Deliberations Expected
Direction of Tax Reform Including Adjustment of Major Shareholder Capital Gains Tax Threshold to Be Decided... Task of Mediating Ruling Party Differences
Accelerating Formulation of Trade and Security Strategies Ahead of Likely South Korea-U.S. Summit at the End of August

After completing a five-day vacation by August 8, President Lee Jaemyung faces a host of pressing issues as he returns to work over the weekend. Starting on the 10th, he must hold a summit meeting with To Lam, General Secretary of the Communist Party of Vietnam, who will be making a state visit to Korea for four days and three nights. President Lee will also preside over a Cabinet meeting to discuss the tax reform plan and finalize the list of those to be granted special pardons for Liberation Day. In addition, he needs to review the national policy tasks and government reorganization plan to be announced by the National Policy Planning Committee on the 13th, refine the message he will deliver at the National Appointment Ceremony on Liberation Day on the 15th, and accelerate preparations for the South Korea-U.S. summit, which is likely to take place at the end of August.

Yonhap News

According to the Office of the President, To Lam, General Secretary of the Communist Party of Vietnam, will pay a state visit to South Korea from the 10th to the 13th. This marks the first visit in 11 years by a Vietnamese Communist Party General Secretary, the highest-ranking official in Vietnam, since Nguyen Phu Trong’s visit during the Park Geunhye administration in 2014. President Lee plans to make the most of this first state visit by To Lam, discussing a wide range of issues beyond politics, security, and trade, including future strategic areas such as high-speed rail and smart cities.

In a recent interview with Vietnamese media, President Lee emphasized the significance of the Vietnamese Communist Party General Secretary’s visit, stating, "On the international diplomatic stage, our two countries are comprehensive partners moving forward together into the future," and added, "There is a growing need for cooperation from the perspective of peace on the Korean Peninsula." He also announced a goal to achieve $150 billion in bilateral trade with Vietnam by 2030 through enhanced cooperation.

At the Cabinet meeting on the 12th, which will be the first he presides over after returning to work, President Lee must finalize the list of those to receive special pardons for Liberation Day and coordinate the contentious tax reform plan. The Ministry of Justice held a pardon review committee meeting the previous day and drew up a list of individuals, including politicians and those convicted of livelihood-related crimes, for pardon and reinstatement. Reportedly, the list includes former Justice Minister Cho Kuk, former Dongyang University professor Chung Kyungshim, former lawmaker Choi Kangwook, and former Seoul Metropolitan Office of Education Superintendent Cho Heeyeon, all from the Cho Kuk Innovation Party.

Former Justice Minister Cho Kuk, who was sentenced to 2 years in prison by the Supreme Court on charges including 'admission fraud involving his children' and 'cover-up of Blue House inspection,' is holding a press conference at the National Assembly on the 12th. Photo by Kim Hyunmin

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The possibility of pardoning and reinstating former party leader Cho Kuk is a matter of intense political interest. President Lee is expected to weigh the pros and cons until the last moment before making a decision. According to a survey conducted by JoWonCNI and Straight News of 2,018 people from the 2nd to the 4th, 48% supported the pardon of Cho Kuk while 47.6% opposed it. Even within the Democratic Party, opinions are divided between those in favor of the pardon and those urging caution, making the decision particularly challenging.

The direction of the tax reform plan, which includes lowering the threshold for major shareholders subject to capital gains tax from the current 5 billion won to 1 billion won, is another issue that requires President Lee's decision. The tax reform plan involves amending the enforcement decree. The Democratic Party plans to convey its final position on the tax reform plan at a high-level party-government meeting on the 10th. Depending on how President Lee coordinates this issue, there could be significant shifts in support and public opinion within the party.

Strategies must also be developed in preparation for the South Korea-U.S. summit, which is likely to be held at the end of August. Although a recent round of trade negotiations made progress with agreements such as a 15% reciprocal tariff and the creation of a $35 billion U.S. investment fund, the details have yet to be finalized. Furthermore, President Donald Trump has declared that, in addition to reciprocal tariffs, he will impose a 100% tariff on all integrated circuits and semiconductors exported to the United States. While South Korea has secured promises of most-favored-nation treatment for semiconductors and pharmaceuticals, there is still cause for concern given President Trump’s unpredictable actions.

Security negotiations are also likely to intensify. The Trump administration is expected to put major issues on the table under the banner of "modernizing alliances," including increasing defense spending to 5% of GDP, raising South Korea’s contribution to the cost of stationing U.S. troops, and strengthening extended deterrence against China. Security issues are likely to be a key topic at the upcoming South Korea-U.S. summit. The Lee Jaemyung administration, which advocates pragmatic diplomacy centered on national interests, must find a way to strengthen the South Korea-U.S. alliance while maintaining friendly relations with China and Russia.

There is also speculation that President Lee will soon appoint ambassadors to major countries. With a series of bilateral and multilateral meetings scheduled, further delays in appointments are not feasible. Currently, ambassador posts for the United States, China, Japan, and Russia remain vacant. Former First Vice Minister of Foreign Affairs Lim Sungnam and former President of the Korea National Diplomatic Academy Cho Byungjae are being mentioned as possible candidates for U.S. ambassador. In addition, appointments may be made for the Minister of Education and the Minister of Gender Equality and Family, both of which remain vacant due to previous candidates withdrawing. Park Baekbeom, former Vice Minister of Education, is being considered for the education minister post, while Kwon Insook, former Democratic Party lawmaker, and Seo Eunsook, former Supreme Council member, are being mentioned as candidates for the gender equality and family minister post.