Lee Jae-myung faces first major test as US tariff deadline looms

Among the many pressing challenges facing newly elected President Lee Jae-myung, top of the agenda is navigating the ongoing tariff negotiations with the US.

The clock is ticking as the July 8 deadline for the US tariff reprieve is approaching. The Trump administration imposed 25 percent “reciprocal" tariffs on all imports from South Korea in April. Unless a new trade deal is reached, tariffs will jump from the current 10 percent to 25 percent when the 90-day grace period expires.

Observers say the high-stakes negotiations will likely serve as an early and defining diplomatic test that could shape Lee's single, five-year presidency.

Lee, who took office immediately without the usual two-month transition period, acknowledged the urgency of the situation even before his election victory. Asked what his first presidential directive would be on Monday, a day before the election, Lee said “the most serious problem is the economy," identifying trade negotiations with US President Donald Trump as the “most pressing issue” in an interview with CBS Radio.

Since April, trade talks between Seoul and Washington have been ongoing, including a high-level “2+2” dialogue and two rounds of technical talks at the director level.

Seoul has been pushing for reduced tariff rates or exemptions through a comprehensive deal covering both tariffs and broader economic cooperation.

But progress has been slow, largely due to Korea’s leadership vacuum, cycling through multiple acting presidents in recent months. Compounding the tariff issue, non-tariff barriers have emerged as a key sticking point in the bilateral talks. The US Trade Representative has particularly flagged Korea’s restrictions on imports of US beef from cattle over 30 months old and regulations on the overseas transfer of high-precision mapping data.

South Korea’s Industry Minister Ahn Duk-geun, who led the negotiations until recently, said that there was not enough time before the July deadline and suggested there could be potential delays due to the election.

For export-dependent Korea, the outcome of the tariff talks will have far-reaching consequences. If reciprocal tariffs take effect, they could have a devastating impact on the Korean economy, already battered by global trade tensions and domestic political turmoil. The country's key export sectors, like steel and automobiles, are already hit with aggressive sector-specific duties from the US, Korea's second-largest trading partner after China.

Now the baton is passed, and it’s up to Lee to face Trump and strike a deal.

Experts expect Lee will try to buy some time for trade talks and avoid being the first to strike a deal. He would likely observe how the US negotiates with similarly positioned countries such as Japan and India to set a benchmark.

“Lee won’t overreact initially and he will take his time,” said Park Sang-byeong, a political commentator and professor at Inha University. “Lee is unlikely to make quick decisions on trade, since the situation is changing within the US. Trump is also facing internal opposition at home, so there’s no reason for Korea to move first.”

During a televised debate on May 18, Lee said, “There’s no need to rush into an early agreement,” citing how Japan and China have revised their stances in their negotiations with the US.

Heo Yoon, professor of international studies at Sogang University, emphasized the need for Seoul to check whether a delay to the so-called "July package" is feasible through the diplomatic dialogue channel with Washington.

“The administration needs to see if we can get more time in the discussions, and what Washington’s sentiments are,” said Heo. “In the meantime, Lee should appoint a new trade minister, who doesn’t require a parliamentary confirmation hearing, or directly designate a high-level trade envoy, which would allow immediate engagement with Washington.”

Many expect veteran trade negotiator Kim Hyun-chong, who served as Lee’s campaign adviser on foreign affairs and national security, to take a leading role. Serving as trade minister for two liberal leaders, Roh Moo-hyun and Moon Jae-in, Kim was central to establishing the Korea-US Free Trade Agreement. Later, as Moon’s chief trade negotiator, he handled the KORUS FTA renegotiation during Trump’s first term.

Last month, Kim was in Washington to meet with Trump officials, discussing tariff and trade-related issues.

All eyes are now on how Lee’s personal chemistry with Trump. As seen in his first term, Trump appears to prioritize personal rapport with other heads of state when cutting deals.

A face-to-face meeting between the two could happen early this month if Lee decides to attend the G7 summit in Canada from June 15-17, or later at the NATO Summit in the Netherlands from June 24-25.

Although ideologically different from the American leader, Lee has earned the nickname “Korea’s Trump” among supporters for his populist messaging, grassroots style and candid speech.

Hong Hyeong-sik, a political analyst who runs local pollster Hangil Research, described Lee as a “fox” -- a leader who is a strategic, adaptable and a problem-solver who uses a wide range of tactics to achieve his goals.

“Lee could be described as a fox. And for Trump, he appears outwardly a lion, but at his core is a classic fox,” said Hong. “So when two foxes face off, it boils down to who can outmaneuver the other, with strategies and skills.”

Despite both being instinctive political tacticians, Hong pointed out that their backgrounds differ. Trump comes with vast experience in deal-making as a businessman and former president. Lee, by contrast, has experience in legal activism and municipal governance, but has limited exposure to trade or security negotiations.

“When it comes to the technical nature of trade deals, Trump could have the advantage,” said Hong. “But the trade deal isn’t just about who’s cleverer. It’s about who holds the real cards and has more bargaining chips.”

Hong raised concerns about whether Korea is in a strong enough position for negotiations with the US.

"We think semiconductors, EVs, batteries and shipbuilding are bargaining chips," said Hong. "But the US has already brought much of that production home, and what's left is shipbuilding, and possibly defense."