President Trump’s trade agreement with Japan, announced this week, has intensified pressure on South Korea to cut a deal that doesn’t leave it at a disadvantage relative to its biggest rival in East Asia.
Kim Jung-Kwan, South Korea’s industry minister, who arrived in Washington on Wednesday for negotiations, pledged an “all-out effort” to strike a deal by the Aug. 1 deadline to stave off a 25 percent tariff that the White House threatened in April and again this month.
Moving forward, Mr. Kim said he was taking a close look at the terms that Tokyo accepted. Mr. Trump agreed to a tariff rate of 15 percent. Japan vowed to buy more American cars and rice, as well as make more than $550 billion in investments at Mr. Trump’s direction.
The South Korean delegation will need to wait longer for clarity. A meeting planned for Friday with Treasury Secretary Scott Bessent and Jamieson Greer, the U.S. trade representative, was canceled because of Mr. Bessent’s schedule and had yet to be rescheduled.
South Korea and Japan have similar powerhouse industries and trade relationships with the United States, and some of the sticking points are the same, including agriculture and automobiles.
South Korea has limited negotiating levers, because it already committed to drop most of its tariffs to zero in a 2007 trade agreement. Mr. Trump signed a minor revision to that pact in 2018, lifting caps on how many American cars could be exported to South Korea. Nevertheless, the American trade deficit with South Korea has increased every year since then, reaching $66 billion in 2024.
That’s why the heat is still on, despite what South Korea has seen as a productive trade relationship.
“Reciprocity was measured in terms of outcomes and results, not terms and conditions,” said Michael Beeman, a former U.S. trade official for East Asia, on a podcast last week.
Although South Korea is the United States’ largest buyer of beef, the cattle industry has demanded that the country lift its import restrictions of beef over 30 months old, which South Korea has banned since 2008 over concerns that it may introduce mad cow disease. Farming is politically sensitive in the East Asian nation, where rural areas depend on the sale of crops and livestock, especially a native breed of cattle known as hanwoo.
“If tariffs on agricultural imports are eliminated, Korean agriculture is dead,” read signs held by members of the Korean Successor Advanced Farmers Federation at a news conference in Seoul this month, threatening “massive farmer protests” if protections are weakened.
The South Korean government said on Wednesday that it had decided to draw a “red line” and remove the country’s beef and rice markets as a possible concession, according to Yonhap News.
Despite having very low import duties, South Korea does impose other barriers to foreign goods, such as stricter safety and sanitary standards. And in the negotiations, attention has focused on digital services: American tech companies have protested aggressive enforcement actions by South Korea’s competition regulator, as well as restrictions on foreign companies’ use of location data that have partly excluded services like Google Maps.
And then there is investment, which the Americans have sought in the hundreds of billions.
One item likely on the negotiating agenda is a $44 billion natural gas pipeline in Alaska that is at the center of Mr. Trump’s energy program. Mr. Trump said on Tuesday that Japan would form a joint venture with the United States in Alaska, likely a reference to the L.N.G. project, but the Japanese government has yet to confirm it.
Seoul’s public gas utility already has a long-term commitment to purchase L.N.G. in Louisiana. It has hesitated to commit to the Alaska project because of high costs, and because natural gas demand in South Korea is decreasing.
Nonetheless, South Korea has ramped up its investment in the United States significantly in recent years, including Hyundai’s $21 billion commitment to automotive manufacturing in March. Samsung, LG and SK have also funneled billions into battery production for electric vehicles. Prospects for high returns dimmed after Republicans nixed consumer incentives for buying them.
That leaves less room for a large expansion of South Korean business in the United States. Japan promised to invest $550 billion, but the Korea Investment Corporation — the country’s sovereign wealth fund and a potential source of capital — only has $206 billion under management.
South Korean officials have emphasized developing a more cooperative relationship, rather than one that is purely financial. For example, they hope that offering assistance in developing American manufacturing capacity in large ocean vessels and semiconductors — abbreviated “ships and chips” — will count.
“As a longstanding and trusted ally, Korea is uniquely positioned for President Trump’s vision of revitalizing U.S. manufacturing,” said Sarah Ahn, economic minister with the country’s embassy in the United States, on a panel last week. “With Korea’s industrial strength and resilient supply chains, such a partnership would effectively serve both to balance and expand our bilateral trade.”
Choe Sang-Hun contributed reporting from Seoul and River Akira Davis contributed from Tokyo.
Lydia DePillis reports on the American economy. She has been a journalist since 2009, and can be reached at [email protected].
Ashley Ahn covers breaking news for The Times from New York.
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