Seoul has offered to step up investment in the United States in exchange for cuts to reciprocal tariffs, particularly on autos, Trade Minister Yeo Han-koo said after talks in Kuala Lumpur. Yeo spent the week at Korea‑ASEAN, ASEAN‑Plus‑Three and East Asia Summit meetings pressing a late‑July framework that links a Korean investment pledge with tariff reductions, while also urging deeper cooperation on digital trade, supply chains and climate measures.

Korea in Kuala Lumpur: numbers and aims

Trade Minister Yeo Han-koo spent the week in Malaysia meeting counterparts and attending regional summits, making investment and tariff issues the centrepiece of talks. At the core of Seoul's diplomatic push was a framework agreed in late July that links a pledge by Korea to invest in the United States with cuts in reciprocal tariffs, including a planned fall in auto tariffs.

The framework was a frequent topic in bilateral meetings, Yeo's office said. He met US trade officials to go over details and the two sides said they would work toward a "mutually beneficial" outcome, according to the ministry.

And Yeo didn't confine himself to Washington-related issues. He used the Korea‑ASEAN and ASEAN‑Plus‑Three sessions to press for deeper ties with Southeast Asian and East Asian neighbours. Those meetings brought together trade officials from the 10 ASEAN states alongside Korea, Japan and China, and formed part of the broader East Asia Summit attended by economic chiefs from eight other countries including the United States, Russia and India.

Upgrading the Korea‑ASEAN pact

Seoul and ASEAN agreed to begin talks on upgrading their free trade agreement, with negotiators aiming to add new areas of cooperation beyond tariffs.

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The two sides set out to expand the FTA's scope to cover the digital economy, supply-chain resilience and carbon-emission reduction measures, the ministry said.

Yeo framed the push as part of the government’s new southern policy. He said the administration would keep building relations with ASEAN and would prioritise three areas: digital technologies, supply chains and climate-related trade measures. The aim is to create fresh footholds for Korean exporters and to reduce reliance on traditional markets amid rising external trade frictions.

Supply chains, tariffs and plurilateral talk

Supply chains were one of the clearest, recurring themes of the Kuala Lumpur meetings. Ministers and officials discussed practical cooperation to keep goods moving across borders, and how trade agreements could better reflect the digital tools and green standards now embedded in many supply networks.

During the East Asia Summit, Yeo urged measures to protect and promote an open, plurilateral approach to trade, saying the current system led by the World Trade Organization faces strains. The call for new, flexible multilateral arrangements echoes Korea's effort to secure diversified partners and to embed rules that match modern trade patterns, such as data flows and carbon accounting.

Bilateral talks: U.S., EU, Japan and others

In Kuala Lumpur Yeo held bilateral sessions with ministers from nine major economies, including the United States, the European Union, Japan, Malaysia and Australia.

The meetings covered trade and investment ties, and exchanged views on the US tariff scheme that prompted Seoul to seek new markets and tighter regional ties.

On the US front, the late-July framework remains a work in progress. The framework ties tariff reductions to Korea's investment commitment, but the two sides haven't yet resolved how that investment will be financed or how returns will be shared. Those outstanding financing questions were flagged by Yeo's office as points still under negotiation.

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Under the late‑July framework, US sectoral tariffs on Korean autos would be reduced in return for Korea’s investment commitment — though how that investment would be financed and how returns would be shared remain under negotiation, Yeo's office said.

This article was created with AI assistance.