Seoul's frenzied tariff deal blitz brings heavyweights, redefined red lines

Samsung Electronics Executive Chairman Lee Jae-yong set off to the United States in a likely bid to help Seoul's push for a tariff deal with Washington as the Aug. 1 deadline fast approaches.

Deputy Prime Minister and Finance Minister Koo Yun-cheol, center, exits the VIP lounge at Terminal 2 of Incheon International Airport on July 29 before departing for Washington to meet with U.S. Treasury Secretary Scott Bessent. The meeting is expected to finalize ongoing bilateral trade talks. [YONHAP]

As Korea and the United States race toward a last-minute deal in tariff negotiations, Samsung Electronics Executive Chairman Lee Jae-yong departed for Washington Tuesday, signaling possible behind-the-scenes support for Seoul’s efforts to ease trade tensions. His trip comes amid expectations of expanded semiconductor investments that could bolster Korea’s position at the negotiating table.

Deputy Prime Minister and Finance Minister Koo Yun-cheol was also seen at Incheon International Airport on Tuesday, en route to Washington for high-level talks with U.S. Treasury Secretary Scott Bessent. The meeting is expected to be a final effort to narrow differences and avoid the mutual imposition of 25 percent tariffs scheduled to take effect on Aug. 1.

Koo expressed cautious optimism ahead of his departure.

“We will thoroughly explain the programs Korea is preparing and the economic conditions we face, and explore long-term areas of cooperation between the United States and Korea, including in shipbuilding,” he said.

Koo’s visit underscores Seoul’s urgency as it pulls out all the stops to prevent a major trade clash with its largest security ally.

Industry Minister Kim Jung-kwan and Trade Minister Yeo Han-koo are also pursuing additional talks with U.S. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. A meeting could happen as early as Tuesday in the U.S. capital. Kim has been shuttling between Washington, New York and Scotland in recent weeks to get face time with Lutnick.

Observers say the Samsung chief may offer behind-the-scenes support. The company has committed to investing more than $37 billion to build a semiconductor hub in the United States, and the Korean delegation may use the investment as leverage in the talks.

A foundry factory owned by Samsung Electronics in Taylor, Texas [SAMSUNG ELECTRONICS]

Hanwha Group Vice Chairman Kim Dong-kwan has also joined the delegation to support the negotiations. Hanwha, which acquired Philly Shipyard, is a key player in the government’s proposed shipbuilding cooperation initiative, known as "MASGA," short for "Make American Shipbuilding Great Again."

The MASGA proposal includes investment in U.S. shipyards and work force training to revive the country's shipbuilding industry. “Because shipbuilding is of personal interest to U.S. President Donald Trump, the proposal is highly specific and the talks are progressing intensively,” a government official said.

The most contentious issues remaining are the scale of Korean investment in the United States and the degree to which Korea will open its agricultural markets — especially for rice and beef. Done deals with Britain and Japan have required agricultural market concessions in exchange for reduced tariffs.

A national security-purpose vessel is under construction at Dock 4 of Hanwha Philly Shipyard in Philadelphia, Pennsylvania on July 16. [YONHAP]

While the Korean government had previously deemed opening up the agriculture market a red line, it is now on the table. Sources say Seoul is leaning toward offering more access to its beef market instead of rice.

U.S. beef from cattle older than 30 months currently faces import restrictions, but easing the rule could have minimal impact on Korean farmers, as such beef accounts for just 2 to 3 percent of total U.S. beef production.

Pressure from Washington to open the beef market nonetheless remains high.

“No lawmakers we met explicitly mentioned rice, but many expressed frustration over the 30-month import limit on beef,” said Democratic Party (DP) Rep. Kim Young-bae, who recently visited the United States with the Korea-U.S. Parliamentarians’ Union. “There were also complaints about quarantine restrictions on apples and other fruit.”

Members of agricultural and livestock groups chant slogans during a rally opposing the opening of Korea’s agricultural market as part of U.S. tariff negotiations near Samgakji Station in Yongsan District, central Seoul, on July 28. [YONHAP]

Only Russia and Belarus, along with Korea, still ban imports of U.S. beef aged over 30 months. The U.S. Trade Representative’s National Trade Estimate Report lists beef and fruit quarantine rules as barriers to trade, but makes no mention of rice. The report describes the beef restriction as a transitional measure from a 2008 bilateral agreement that is still in place 16 years later.

“From Trump’s perspective, lifting the 16-year ban on U.S. beef could be a trophy win,” said one trade expert.

Beef is also less entangled in multilateral issues compared to rice. Korea imports rice under low-tariff quotas from five countries — the United States, China, Australia, Thailand and Vietnam — based on prenegotiated quotas. Increasing the U.S. quota for rice would require renegotiation with the others, potentially triggering similar demands.

But increasing beef imports may spark domestic political backlash. Under Korean law, imports of beef from cattle older than 30 months require National Assembly approval, and some in the DP are already voicing opposition. Korean public sensitivity remains high due to past scares in the 2000s over mad cow disease.

A price for beef is displayed on the edge of a shelf at a grocery store in Mount Prospect, Ill., July 17. [AP/YONHAP]

“The European Union offered massive concessions to protect its core export sectors like pharmaceuticals and cars,” said Choi Byung-il, president of the BKL Trade Strategy and Innovation Hub. “Korea must now make a similarly strategic political decision to safeguard its key industries.”

Amid intensifying U.S.-China rivalry, Washington is also pressuring Korea to help build a supply chain that boxes out China and to join efforts to curb the country's access to advanced technologies.

“There is growing pressure for Korea to join supply chain initiatives and participate in U.S.-led tech restrictions against China,” one trade official said.

Vietnam, for example, negotiated its tariff deal with the United States on the condition that it would block Chinese exports disguised as Vietnamese products. Korea has also reportedly proposed enhanced cooperation on strengthening technology security.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff. BY AHN HYO-SEONG [kim.minyoung5@joongang.co.kr]