Korea, U.S. agree on ‘July Package’ to eliminate tariffs

South Korea and the United States have agreed to create a "July Package" aimed at eliminating tariffs before the mutual tariff suspension ends on July 8. The agreement signals both countries’ intent to resolve all outstanding trade issues by early July. However, while South Korea, ahead of its presidential election in June, has expressed a preference for a measured pace, the U.S. is aiming for a faster timeline, potentially reaching an agreement as soon as next week. This highlights differing perspectives on the urgency of the negotiations.

On Thursday (local time), a South Korea-U.S. "2+2" trade consultation, involving the finance and trade ministers, was held in Washington, D.C., concluding after about 85 minutes of talks. South Korea presented its vision for cooperation in key areas, including trade, investment, shipbuilding, and energy, which are of particular interest to the U.S. In a local briefing, South Korean Deputy Prime Minister and Finance Minister Choi Sang-mok emphasized that automobiles are the most critical sector in the bilateral trade relationship, with a focus on eliminating tariffs on cars.

The July Package includes four main areas: tariff and non-tariff measures, economic security, investment cooperation, and monetary policy. Working-level consultations between the two countries are set to begin next week. "Today’s meeting was to establish the framework for negotiations. The entire package must be agreed upon," Choi said, suggesting that a deal before South Korea’s presidential election on June 3 is unlikely. He also conveyed to the U.S. the need to consider South Korea’s political schedule. In contrast, U.S. Treasury Secretary Scott Bessent said after the meeting that discussions on a memorandum of understanding and technical terms would begin as soon as next week, signaling a push for quicker progress.


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