S. Korea, U.S. to seek package deal on lifting tariffs by July

Welcome to Within The Frame, where we bring the most pressing issues across the globe into focus. I'm Kim Mok-yeon.

Top trade and finance officials from South Korea and the United States sat down in Washington for high-level talks on Thursday, in a strategic "2+2" format.

The U.S. had requested the meeting, underscoring the urgency and weight of the agenda.

With the current mutual tariff suspension set to expire on July 8th, and industrial stakes running high, much attention was focused on the meeting, which could prove to be a turning point in the economic bilateral relationship.

Though the Korean government emphasized this was a consultation, not a negotiation, U.S. Treasury Secretary Scott Bessent called it a success, stating that Korea had brought its "best proposal."

That rare praise hints at substantive groundwork being laid — possibly in key sectors like energy, shipbuilding, and advanced manufacturing.

With formal negotiations set to begin next week and a change of government on the horizon in Seoul, the key question now is whether both sides can reach a consensus before political dynamics, policy differences, and mounting pressure come into play.

For a deeper discussion on this, we're joined by Kim Minkyun, Professor at Sogang Business School. Welcome.

Also joining us is Troy Stangarone, Former Senior Director at the Korea Economic Institute. Great to have you.

1. (Stangarone) So let's begin with Director Stangarone, the high-level Korea-U.S. trade talks, which took place at the request of the United States.

Why do you think the U.S. proposed a "2+2" format involving both the Treasury Secretary and the Trade Representative?

2. (Kim) Now to Prof. Kim, the Korean government emphasized that this was a consultation, and not a negotiation. How would you assess the significance of this meeting?

3. (Kim) Following the talks, U.S. Treasury Secretary Scott Bessent described Korea as having "brought its best proposal" and called the consultation a success. While the details were not disclosed, what do you think Korea proposed, and why did the U.S. respond so positively? Could it relate to industrial cooperation in areas like energy or shipbuilding?

4. (Kim) It has been reported that both countries agreed to work on a "July Package" ahead of the expiration of the mutual tariff suspension on July 8th, which would address tariff elimination and industrial cooperation. In your view, what is the biggest sticking point in reaching this agreement?

5. (Stangarone) Director Stangarone, President Trump previously referred to a "one-stop shop" approach, suggesting that defense cost-sharing could be bundled with trade negotiations. However, it is said that there was no mention of defense cost-sharing during this round of consultations. Why do you think that is?

6. (Kim) Some believe that defense cost-sharing could come up in the next round. Korea maintains that trade and security are separate matters. Given that stance, Prof. Kim, how should Korea prepare for future talks?

7. (Kim) After the consultations, the Korean government said that both sides had a shared understanding of the need for calm and orderly discussions, taking Korea's political schedule into account.

However, U.S. Treasury Secretary Scott Bessent stated that talks are moving quickly and suggested a deal could be reached as early as next week.

How do you interpret this difference in tone between the two sides?

8. (Both) Formal negotiations are expected to begin as early as next week, but a comprehensive agreement — including tariff elimination — may be reached under the next Korean administration and the Trump administration. In that case, how should the current Korean government respond to the fast pace being pushed by the U.S.?

9. (Kim) From April 1st to 20th, Korea's exports to the U.S. dropped 14.3% compared to the same period last year. Even auto parts, which have yet to face tariffs, declined by 1.7%. What's driving this decline in export performance? And what economic impact could the now full-fledged Korea-U.S. trade talks have?