Korea aims for better terms than Japan in U.S. tariff negotiations
![U.S. President Donald Trump waves as he greets Japanese Prime Minister Shigeru Ishiba upon arrival outside the West Wing of the White House in Washington on Feb. 7. [AP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/07/24/55368b28-6333-44c8-95c7-a279aff38cf5.jpg)
U.S. President Donald Trump waves as he greets Japanese Prime Minister Shigeru Ishiba upon arrival outside the West Wing of the White House in Washington on Feb. 7. [AP/YONHAP]
The United States and Japan reached a trade agreement on Tuesday reducing the anticipated 25 percent reciprocal tariffs on Japanese goods to 15 percent. This is the lowest rate among countries with which the U.S. has struck similar deals in recent months. The results varied by-product category. For automobiles, the United States agreed to cut the current 25 percent tariff to 12.5 percent, which, when combined with the existing 2.5 percent tariff, totals 15 percent. However, existing tariffs of 50 percent on steel and aluminum will remain. Japan also secured assurances that U.S. tariffs on semiconductors and pharmaceuticals would not be less favorable than those imposed on other countries.
In return, Japan pledged $550 billion in investments in the United States and agreed to form a joint venture for a liquefied natural gas (LNG) project in Alaska. U.S. President Donald Trump emphasized Japan’s decision to open markets to U.S. automobiles, trucks, rice and certain agricultural products, though details remain unclear. Since Japan already applies no tariff to U.S. vehicles, the move likely involves easing nontariff barriers. In the case of rice, Japan is believed to have increased the share of U.S. imports within its minimum market access quota. Tokyo managed to reduce the overall tariff burden while giving Trump politically symbolic wins.
As Korea faces a similar deadline on Aug. 1, it must approach the final week of negotiations with a clear and strategic plan. Given Korea’s direct competition with Japan in the U.S. market, Seoul should aim for terms at least as favorable. If the tariff on Korean automobiles is set at 12.5 percent, equal to Japan's, the total tariff burden could actually be lower thanks to provisions in the Korea-U.S. FTA. Under the FTA, Korea's passenger cars are already exempt from import duties, with the exception of trucks. This contributed to a sharp rise in Hyundai and Kia stock prices on Tuesday, driven by investor optimism.
Negotiations with Washington are complex, involving not only trade but also issues such as defense cost-sharing. The guiding principle must be national interest, approached with pragmatism. While agricultural products like rice and beef are politically sensitive, they should be considered in the broader context of consumer benefit and national interest. Korea must avoid overpaying to protect these sectors unconditionally.
Every trade negotiation abroad is also a domestic one. A capable and practical government must prepare compensation measures for affected industries and communicate transparently with the public. Korea should take note of the U.S.-Japan agreement to collaborate on semiconductors, steel, shipbuilding, artificial intelligence and quantum technologies and strive to achieve even stronger outcomes.
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
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