South Korea will use Japan’s recent trade deal with the U.S. as a reference while it negotiates the final terms of its own agreement. The discussions also include details of a $350 billion investment package, Finance Minister Koo Yun-cheol said on Monday.
“There are pros and cons for us. The positive side is that, since we know the outcome of Japan’s negotiations, we can approach the U.S. with more clarity,” Koo told reporters.
However, Foreign Minister Cho Hyun stressed that Seoul would not accept the same terms agreed in the Japan-U.S. deal, which included a larger $550 billion package.
Trade Talks Still in Progress
President Donald Trump signed an executive order last week implementing the Japan trade deal. South Korea, however, has yet to finalize a written agreement on the framework announced in July between Koo’s team and the U.S.
Japan’s deal lowered U.S. tariffs on car imports to 15% from 25%, leaving South Korean automakers at a disadvantage as they continue to face the higher tariff.
Koo said South Korea would continue to negotiate “in a way that protects our national interest as much as possible.” Talks with the U.S. also cover foreign exchange policy, which is expected to be included in the final announcement once negotiations conclude.
Investment Package and Tariff Challenges
South Korea and the U.S. are still working out the structure of the $350 billion investment package. Seoul is exploring ways to roll out multiple U.S.-based investment projects efficiently under the deal.
In parliament, Foreign Minister Cho said negotiations were delayed because South Korea has taken a tough stance on U.S. demands for the investment package. He warned that accepting terms similar to Japan’s agreement would cause problems for Seoul.
Japan’s arrangement required splitting free cash flows from its $550 billion package, with 50% going to the U.S. initially and then 90% after a threshold was met.
Tariffs and Global Trade Strategy
Meanwhile, the Trump administration asked the U.S. Supreme Court last week to review its emergency tariffs under a 1977 law. A lower court had struck down most of the levies, which have been central to Trump’s trade strategy.
Koo said South Korea is preparing for “every possible scenario.” He emphasized that it is now “more pressing than ever” to respond to global trade changes, particularly tariffs. The government plans to announce new trade strategies by October to adapt to the shifting global order.
