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Yeo Han-koo, Vice Minister for Trade. (Photo: Yonhap News) |
[Alpha Biz= Kim Jisun] Seoul, September 15, 2025 — Yeo Han-koo, Vice Minister for Trade at Korea’s Ministry of Trade, Industry and Energy (MOTIE), departed for Washington, D.C. on the 15th, just one day after Trade Minister Kim Jeong-gwan returned from two meetings with U.S. Commerce Secretary Howard Lutnick without tangible results.
The follow-up negotiations on U.S.-Korea tariffs remain at an impasse, while Japanese automobiles and parts are set to benefit from a tariff reduction from 27.5% to 15% starting September 16. Korean automakers, still subject to a 25% tariff, face mounting challenges in the U.S. market.
Speaking to reporters at Incheon International Airport before his departure, Yeo stated, “Our government is doing everything possible on all fronts.” During his trip, he is expected to meet U.S.
Trade Representative Jamieson Greer to discuss non-tariff barrier issues, including improvements to agricultural quarantine processes and easing of automobile safety regulations, which were agreed upon in late July. He is also expected to convey Seoul’s position on the highly contentious proposed USD 350 billion investment fund in the U.S. Yeo emphasized, however, “There will be no new agricultural market openings as part of these talks.”
On the issue of U.S. tariffs on Korean cars and parts, Yeo said, “We are working toward a balanced and fair outcome,” signaling that Seoul cannot easily agree to the U.S.-proposed USD 350 billion investment package given the heavy impact of the 25% tariff on Korea’s auto exports. His remarks align with President Lee Jae-myung’s statement that Korea will not accept any deal that undermines rationality and fairness.
Meanwhile, Japan is poised to benefit from a significant tariff cut. Beginning September 16, tariffs on Japanese cars and parts will be reduced from the current 27.5% (2.5% base tariff plus 25% item-specific tariff) to 15%. On September 4, Tokyo signed a memorandum of understanding with the U.S., pledging USD 550 billion in investments across semiconductors, energy, and other sectors during President Donald Trump’s term. In return, Trump issued an executive order lowering tariffs on Japanese auto products. The Japanese government confirmed the order was published in the Federal Register on September 9, with the revised tariffs set to take effect within seven days.
This development makes Japan the second country after the U.K. to secure a reduction in auto tariffs. With Japan now enjoying a 15% tariff compared to Korea’s 25%, Korean automakers face tougher competition in the U.S. market. Hyundai and Kia had already lost tariff-free benefits under the Korea-U.S. Free Trade Agreement (FTA) in April due to Trump administration auto tariff policies, which reduced their Q2 (April–June) operating profits by KRW 1.5 trillion.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
