The new South Korean government has set up a task force to deal with trade and tariff negotiations with the United States.
The task force was launched on Monday following an emergency meeting on Friday after the US announced a 50% tariff on imported appliances, such as refrigerators and washing machines – steel and aluminium products. That is due to take effect on June 23.
The task force will deal with matters across industry and the energy sector and will also coordinate with the private sector, the Industry Ministry said in a statement.
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Minister for Trade Yeo Han-koo, who was appointed last week by the new liberal President Lee Jae-myung, said the team had a major responsibility as “businesses and the public have experienced great difficulties due to US tariff measures.”
The task force, made up of industry ministry officials overseeing trade, manufacturing, energy and investment, will coordinate across the government and with the private sector to devise a successful strategy, said Yeo, who will head the group.
After talks on Friday with major appliance makers such as Samsung and LG, the government said it would closely monitor developments in the US, while working with the industry task force to assess the impact of tariffs and consider support measures for affected companies.
Second supplementary budget
Lee, who won a snap election on June 3 and said during his campaign there was no need to rush into a trade deal with the United States, has since said he will speed up talks with Washington.
After Lee held a phone call with US President Donald Trump, his office said the leaders agreed to work towards a deal acceptable to both countries.
South Korea was seeking a waiver from tariffs announced by the Trump administration that affect the country’s major export industries, including automobiles, steel and semiconductors.
The government will introduce a second supplementary budget for the year on Thursday, after passing a 13.8 trillion won ($10.13 billion) budget in May, to support an economy weighed down by US tariffs and sluggish consumer demand.
The budget plan will include spending to help the recovery of people’s livelihoods and will be taken up at a cabinet meeting, a spokesperson at the presidential office said on Monday.
President Lee Jae-myung has argued for expansionary fiscal policy and cash-like handout schemes to boost consumer demand, as the country’s central bank last month slashed this year’s economic growth outlook to 0.8%, nearly half the previous 1.5%.
Among specific measures, spending to ease the burden of rising food prices will be included in the plan, Acting Finance Minister Lee Hyoung-il said at a separate meeting on inflation.
At the meeting, the government decided to extend tax breaks on oil products by two months to the end of August, in response to a surge in oil prices amid heightened geopolitical tension in the Middle East.
Financial support and import quota increases were introduced to stabilize rising food prices, which President Lee Jae-myung said were causing “too much pain”, while tax cuts on car purchases were extended until the end of the year to support the auto industry.
South Korea’s consumer inflation weakened to a five-month low of 1.9% in May, below the central bank’s medium-term target of 2% and market expectations, as petroleum prices dropped 2.3% from a year earlier, but prices of processed food products jumped 4.1% and dining services rose 3.2%.
- Jim Pollard with Reuters
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