South Korea announced new measures on Wednesday to ease taxes on the country's automakers as trade negotiators rushed to Washington to seek a deferral from President Donald J. Trump's comprehensive tariffs.
The two efforts highlighted the delicate balance that South Korea needs to strike the country after the country, one of Asia's most loyal US allies, was hit by some of the heaviest tariff rates announced last week.
On Tuesday, Trump cheered on the imminent arrival of a negotiation team from South Korea. This is led by Trade Minister Cheong In-Keo.
“Their top teams are on planes heading to the US and things look good,” Trump said on the true social platform. “We're dealing with a lot of other countries as well. They all want to do business with the US.”
South Korea's interim leader, Prime Minister Han Duck Saw, indicated on Tuesday that his country is ready to make compromises aimed at please Trump.
In an interview with CNN, Han said South Korea would not unite with China to oppose Trump's tariffs. South Korea “clearly wants to negotiate” with Washington, he said. “I don't think that such a counterattack will dramatically improve the situation.”
In a call with Trump later Tuesday, Han also said his country is willing to work with the US on shipbuilding and liquefied natural gas to reduce South Korea's $55.7 billion trade surplus.
South Korea built war-torn countries into a global economic powerhouse, primarily based on exports. Trump's sweep 25% tariff hit the biggest export engines, particularly the automotive industry.
South Korea's measures to support automakers on Wednesday included a rise in financial support to 15 trillion won (15 trillion won from its previous plan) in 2025. Taxes on car purchases will be reduced from the current 5% to 3.5% from 5% in June, increasing subsidies for electric vehicles.
In addition to trade, South Korea is more dependent than ever for security with the US and the military alliance seven years ago. That's even more pressing as North Korea spreads its nuclear threat and forgets its military alliance with Russia.
Trump has already turned this week's negotiations into more than a trade talk, indicating that South Korea hopes to significantly increase what it pays to keep 28,500 American troops in the country's soil.
A statement from Han's office said the US has reaffirmed its commitment to a military alliance with South Korea. However, after the call, Trump also said he and Han had spoken about “the massive military protection payments we provide to South Korea.”
