Treasury Secretary Scott Bessent described the U.S.-South Korea meeting as "very successful", after the two countries began trade negotiations with Seoul, which was seeking to reduce the tariffs that President Donald Trump wants to impose.

Bessent, a White House reporter, told reporters that the bilateral meeting held with South Korea was a success. We may be moving more quickly than I expected, and we'll be speaking technical terms by next week.

Bessent stated, "South Koreans arrived early and they brought their A-game. We will see if that is what they do."

Bessent did not provide any other details about the talks, which were also expected to include cooperation on shipbuilding, energy and perhaps shared defence costs. Bessent, along with other members of Trump's trade team, met with foreign trade and finance officials to try and strike deals with tariffs on the sidelines this week of meetings in Washington of the International Monetary Fund Group and World Bank Group.

South Korea, facing reciprocal U.S. tariffs of 25%, is one of the first countries that the Trump administration initiated trade negotiations with. This follows its first face to face discussions with Japan last week, another important Asian ally who was slapped by 24% in tariffs. Bessent also had a meeting with Japanese officials scheduled for Thursday.

He said that given the fact that Seoul competes with other countries, and has a 90-day deadline before a tariff pause ends, it was likely that talks would be extended. They may even lead to a renegotiated U.S. Korea Free Trade Agreement.

Trump has repeatedly singled out South Korea as a key U.S. ally for its record-breaking trade surpluses. In 2024, the United States' surpluses reached $55.6 billion, a 25% increase from 2023, and five times more than in 2019.

Seoul confirmed that the meeting was at the United States' request. It comes after Trump spoke with South Korea's acting president Han Duck-soo on April 8 about shipbuilding, energy purchases and a gas project in Alaska.

Han stated on Thursday, ahead of the summit, that "the government will try to find a win-win" between the two nations, focusing on three key areas: trade balance, LNG and shipbuilding, all under the principle of national interest as the top priority."

South Korean officials have hailed shipbuilding since the call as "a very important card" that it holds. South Korea is second in the world after China as a shipbuilder, and Trump specifically requested cooperation with the sector upon his return to power.

Seoul, on the other hand, has adopted a more conservative stance in relation to the Alaskan Gas Project, stating that participation could form part of a negotiated package. However, it also raised questions regarding its profitability.

South Korea's automotive sector is considered particularly vulnerable to tariffs as 49% of the country's total auto exports are cars sold to the United States.

Seoul announced emergency measures to support major exporting companies like Hyundai Motor and Kia.

The issue of payment for the 28,500 U.S. soldiers that South Korea hosts was raised by Industry Minister Ahn Duk Geun on Wednesday. Foreign Minister Cho Tae Yul told lawmakers it was not a matter to be treated as a whole and would be handled separately.

Seoul's delegation, which will be preparing for the discussion on non-tariff obstacles, will include representatives from eight different Ministries: Finance, Trade, Foreign Affairs, Technology, Transport, Environment, Agriculture and Health.

South Korea is one of three Asia-Pacific nations that has a comprehensive trade agreement with the United States. This pact eliminates nearly all tariffs. The agreement was signed in 2007, but was revised in 2018, during Trump's second term, after he called the original deal "a terrible deal."

Leading by Example

South Korea is still undergoing its most serious political crisis in years.

The snap election for the presidency will take place on June 3 after former president Yoon Suk Yeol has been impeached this month and removed from his office over his failure to declare martial law.

Oh Suk Tae, economist at Societe Generale, said: "We expect the U.S. and Korean governments to make progress in their negotiations only after the snap election."

Oh stated that it would be particularly difficult for South Korea under an acting President to commit to any firm commitments on energy projects or defence costs.

Han, however, has expressed in interviews this week his willingness to come to a compromise. He said that the country would not fight Washington, as it owes Washington for the recovery of the 1950-1953 Korean War.

If acting president Han Duck Soo appears to negotiate successfully tariff waivers for South Korea - particularly for its auto exports - he will position himself more as a candidate for the presidency, said economists from S&P Global Market Intelligence.

FACTBOX separate on trade negotiations.

(source: Reuters)