U.S. Treasury Secretary Scott Bessent revealed on Thursday after bilateral talks that the United States and South Korea may reach a "memorandum of understanding" on trade as early as next week. Bessent stated, "Our bilateral meetings were very successful, progressing faster than expected, and we may discuss technical terms and possibly reach a memorandum of understanding as early as next week."
Bessent did not disclose the specific details of the memorandum, but previously, the Trump administration has been facing pressure from multiple countries to reduce high tariffs. Trump provided a 90-day "grace period" to allow time for negotiations with relevant countries. Currently, investors and business leaders are closely watching for substantial progress on Trump's trade agenda.
According to South Korean officials, South Korean Finance Minister Choi Sang-mok and Industry Minister Ahn De-geun met with Bessent and U.S. Trade Representative Jamieson Greer in Washington on Thursday. South Korea is among the first countries to negotiate with the United States, and following Japan's discussions last week, other countries seeking tariff reductions are closely monitoring these negotiations.
South Korea is currently facing a 25% import tariff on goods such as automobiles, steel, and aluminum. Trump announced an interim reduction to 10%, with a 90-day transition period. To reduce its trade surplus with the U.S., the South Korean government has proposed several measures, expected to be discussed in the talks. In 2024, South Korea's trade surplus with the U.S. increased by approximately 25% year-on-year, reaching $55.7 billion.
Preliminary trade data from South Korea shows that U.S. tariffs have already impacted Korean exports, with customs data indicating a 5.2% year-on-year drop in overall exports in the first 20 days of this month. Trump earlier stated that his call with South Korea's acting president Han Duk-soo was "very pleasant," covering topics like tariffs, shipbuilding, and military support, and expressed optimism for an agreement beneficial to both countries.
Although Trump has frequently expressed a willingness to reach agreements with major trade partners and declared progress, no final agreements have been made with any country so far. Traditional comprehensive trade agreements typically take years to finalize, so the White House may opt for more limited agreements or resolve key details before Trump's tariff hike deadline.
Trump recently announced "significant progress" with Japan, although Japanese Prime Minister Shigeru Ishiba stated that Japan would not continue to make concessions in trade negotiations with the U.S. Meanwhile, Canadian Prime Minister Mark Carney said on Thursday that Canada has enough leverage in talks and can wait longer if necessary, not rushing to reach an agreement with Trump.
