Lee Says Unsure South Korea Can Land US Trade Deal by Deadline

JeremiahDigital Marketing2025-07-041110

(Bloomberg) -- South Korean President Lee Jae Myung said it remains unclear if trade talks between Seoul and Washington can result in a deal before next week’s deadline to avert sweeping tariffs from President Donald Trump.

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“We are doing our best,” Lee said on Thursday, speaking in his first press conference since taking office last month. “It’s still not clear to each side what the other side wants,” he said, adding that the negotiations have not been easy so far.

South Korea, a key US ally and major exporter of cars, semiconductors, and batteries, has seen its companies and its economy caught in the crosshairs of Trump’s tariff campaign. Shipments abroad are equivalent to more than 40% of the size of the economy, making South Korea particularly vulnerable to US duties and any impact they have on global trade.

Touching on themes beyond trade and the economy, Lee also said he would resume dialogue with North Korea, and improve ties with China and Russia.

Officials in Seoul have acknowledged that the chances of reaching a trade deal before higher tariffs kick in on July 9 are slim. Without an agreement or an extension, across-the-board reciprocal tariffs on exports to the US will rise to 25% from 10%. Trump has ramped up pressure on countries to strike deals by saying he doesn’t plan to extend the deadline.

South Korea’s economy contracted in the first quarter and the Bank of Korea slashed its 2025 GDP forecast to 0.8% from 1.5% blaming it on uncertainty over the tariffs. Governor Rhee Chang-yong said this week that US trade actions remain a concern for monetary policy. The BOK has lowered interest rates four times since late 2024, with the latest cut in May bringing the benchmark rate to 2.5%.

In his remarks delivered from the Blue House, Lee pledged to revive the faltering economy and improve living standards, and outlined plans to boost growth and stabilize the property market.

“Easing the suffering of the people and making a big leap in growth will be our top priority,” Lee said, flagging that one of his first moves as president was to launch an emergency economic task force.

A resurgence in property prices in some pockets of Seoul again threatens to put homeowning out of reach for many people while likely adding to household debt and the potential for a bubble that may cause instability in the financial system.

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“We will work to stabilize the real estate market while respecting market principles and protecting consumers,” Lee said, adding that there were many tools available to achieve this.

On relations with Pyongyang, Lee said humanitarian aid from Seoul would help improve lives for North Koreans. He said the North Korean response in stopping of loudspeakers blasting messages across the border between the two nations had taken place faster than he expected.

Lee also reiterated previous comments on Japan, saying the two countries are inseparable, while indicating that thorny issues remain including territorial issues.

“While fighting with our right hand, we hold our left hands. So I think we need a flexible yet reasonable approach,” Lee said.

Lee was elected on June 4 in a vote triggered by the ouster of his conservative predecessor, Yoon Suk Yeol. Lee’s victory has spurred renewed optimism among global investors after six months of political turmoil in the wake of Yoon’s attempt to impose martial law. South Korean assets have rallied on expectations that Lee’s market-friendly platform may usher in a period of reform.

The liberal leader assumed office with one of the highest initial approval ratings in recent memory. Consumer confidence has surged to a four-year high, while the benchmark Kospi index has climbed roughly 25% since the departure of Yoon in early April making it one of the world’s best-performing equity markets.

Lee said the stock market’s rally reflected renewed public trust, and reiterated his administration’s ambition to usher in a “Kospi 5,000” era.

--With assistance from Shinhye Kang, Seyoon Kim and Jaehyun Eom.

(Recasts with Lee’s trade comments, other details.)