By Joyce Lee and Hyunjoo Jin
SEOUL (Reuters) -South Korea’s Industry Minister Ahn Duk-geun said on Wednesday that Seoul will seek a speedy solution over auto tariffs in trade talks with U.S. counterparts and is also prepared for the prospect of Washington bringing up the issue of defence costs.
U.S. ally South Korea is due to hold trade talks in Washington on Thursday after the U.S. introduced 10% blanket tariffs and 25% auto and steel tariffs. Reciprocal 25% tariffs on South Korea have currently been paused for 90 days.
"We are preparing for negotiations calmly and carefully. However, in the case of automobiles that are heavily hit by 25% tariffs now, we plan to do our best to come up with a solution as soon as possible," Ahn told reporters before boarding a flight to Washington.
South Korea’s overall exports for the first 20 days of April fell 5.2% from a year earlier, dragged down by U.S.-bound shipments. Exports of automobiles fell 6.5% and auto parts dropped 1.7%.
South Korea announced emergency support measures for its auto sector this month, seeking to reduce the blow of the tariffs on a sector that has seen years of sharply rising exports to the United States.
In 2024, South Korea’s exports of automobiles to the United States were valued at $34.7 billion, accounting for 49% of its total auto exports from companies such as Hyundai Motor (OTC:HYMTF) and Kia.
Ahn also said that South Korea is prepared for the possibility that the issue of defence costs related to the presence of U.S. troops in the country could become part of the talks.
U.S. President Donald Trump has said that reopening talks on sharing the cost of keeping 28,500 troops in South Korea would be part of "one-stop shopping" negotiations with Seoul. South Korean officials have previously said the issue was not up for negotiation.
South Korea’s Foreign Minister Cho Tae-yul told a parliamentary committee on Wednesday that it was not appropriate to include defence costs as part of a package trade deal and reiterated there would be no rush to negotiate a deal.
Nonetheless, he said that even though defence costs were not on the agenda for Thursday’s talks, South Korea would listen if Trump sought to bring up the issue.
Cho said South Korea could use the prospect of investing in an Alaskan liquefied natural gas project and cooperation over shipbuilding as leverage during the talks.
While South Korea needed to carefully review whether the LNG project is economically feasible, it could consider joining hands with Taiwan, Japan and other neighbours in the project, he said.