🇰🇷 South Korea Seeks Extension of U.S. 90-Day Tariff Pause

🇰🇷 South Korea Seeks Extension of U.S. 90-Day Tariff Pause

June 30, 2025 | Sejong / Washington
South Korea has formally requested an extension of the 90-day pause on U.S. tariffs, currently scheduled to expire on July 9, 2025, as negotiations on a broader trade package continue. A senior Korean trade official indicated that talks are unlikely to conclude before the deadline and that Washington is expected to make a decision by July 8 about granting additional time reuters.com+13reuters.com+13ground.news+13.

🔄 Background: Why the Pause Matters

• Origin of the tariffs: In late April, the U.S. imposed a 10% blanket tariff and a 25% “reciprocal” tariff on South Korea—part of a broader set of protectionist measures tied to President Trump’s trade agenda. In response, both nations agreed to a 90-day pause to allow time for negotiations reuters.com.

• Trade leverage: South Korea is striving for exemptions—especially on key exports like automobiles and steel—and hopes the extension will ensure more time to finalize these arrangements .

🤝 Current Talks & Key Issues

• Senior-level meetings: The third round of technical discussions took place last week in Washington. Trade ministers reaffirmed their commitment to reaching a deal “as soon as possible” x.com+10reuters.com+10reuters.com+10.

• Primary concerns: While tariffs are the immediate issue, the U.S. is also pushing South Korea to address non-tariff barriers that affect American exports—even though most Korean tariffs on U.S. imports were already minimal under the existing Free Trade Agreement (FTA) reuters.com.

• Parallel negotiations: Beyond tariffs, both sides are negotiating on sensitive topics such as foreign exchange policy, defense cost-sharing for U.S. troops in South Korea, and potential restrictions on South Korean chipmakers operating in China reuters.com.

📊 Economic Stakes for South Korea

• Exports on the rebound, but fragile: After a slight dip in May, exports surged in June—semiconductor shipments led the increase, followed by car exports. However, economists warn that export growth may be tempered in Q3 if the tariff situation remains uncertain reuters.com+6reuters.com+6reuters.com+6.

• Pressure on key industries: South Korea’s economy is highly dependent on semiconductor, automotive, and steel exports. A tariff extension delay could dampen recovery and affect overall growth .

🧭 U.S. Perspective: Balancing Firmness and Flexibility

• Trump administration's stance: President Trump signaled openness to deadline flexibility—though he noted he expected no extensions would be needed, while Treasury Secretary Bessent indicated that extensions might be granted for countries negotiating in good faith reuters.com+1reuters.com+1.

• Side concerns: The U.S. has broader concerns around trade fairness—addressing non-tariff barriers and fostering stronger reciprocal market access reuters.com+1reuters.com+1.

🔍 What’s Next?

• July 8 decision point: The U.S. is expected to decide whether to extend the tariff freeze by July 8, one day before the current pause expires reuters.com+1reuters.com+1.

• Momentum expected—if under time pressure: South Korea is looking to capitalize on the urgency created by the looming deadline to secure favorable terms before July ground.news+4reuters.com+4reuters.com+4.

• Broader trade picture: The outcome could signal how the U.S. approaches similar deals with other key partners like Japan and the EU, especially as Trump emphasizes reciprocal trade fairness and cost-sharing commitments from allies reuters.com+6reuters.com+6reuters.com+6.

South Korea is strategically seeking an extension to the July 9 tariff pause to finalize a trade deal that exempts its critical export sectors. The U.S. response, expected by July 8, will determine whether negotiations continue under a cooperative framework—or tariffs snap back, introducing uncertainty into South Korea’s economic recovery and testing bilateral trade relations.