• South Korea's presidential office has denied that a tariff reduction MOU with the United States has been finalized, stating negotiations are ongoing.
  • Substantial progress has been made on reducing U.S. tariffs on Korean auto imports from 25% to 15% in exchange for $350 billion in Korean investment.
  • The denial comes amid heightened U.S. protectionist measures and ahead of a critical Korea-U.S. summit later this month.

South Korea's presidential office has pushed back against reports that a memorandum of understanding on tariff reductions with the United States has been finalized, clarifying that while substantial progress has been made, negotiations continue with certain issues requiring further coordination.

"The reports are not accurate," an official from the presidential office told reporters on Thursday, speaking on condition of anonymity. "We are still in the process of negotiating the details and no final agreement has been signed."

The denial comes despite what multiple sources described as significant breakthroughs in the talks, particularly around a proposed reduction in U.S. tariffs on key Korean exports—most notably autos and auto parts—from 25% to 15%. In return, South Korea would commit to investing approximately $350 billion in the United States over up to 10 years.

Efforts to restructure the trade relationship have hit a snag over specific implementation details, according to people familiar with the matter. Follow-up negotiations will determine critical specifics such as investment schedules and the composition of investment funds, including whether they consist of cash, loans, or guarantees.

South Korean negotiators have emphasized that any final agreement must be "commercially rational" and reflect both countries' interests. They have particularly pushed back against U.S. demands for upfront lump-sum investment commitments, preferring instead a phased approach that aligns with domestic economic planning cycles.

The timing of these negotiations is particularly sensitive given President Trump's recent threats of tariff hikes on major trading partners, including South Korea. Without a deal, the company would be forced into bankruptcy the bilateral trade relationship could face significant strain, with potential ramifications for the countries' longstanding security alliance.

Market participants have been closely watching the negotiations, with Korea's major export industries—particularly automotive, electronics, and steel—vulnerable to U.S. tariff actions. "The uncertainty has been weighing on export-oriented stocks," said a Seoul-based analyst who asked not to be named. "Any clarity would be welcomed by the markets."

In a parallel development that underscores the comprehensive nature of the bilateral talks, negotiators are also close to an agreement that would allow South Korea to enrich uranium and reprocess nuclear fuel for the first time since the 1974 nuclear pact. This would mark a significant shift in nuclear cooperation between the two allies.

The presidential office indicated that while no MOU signing is imminent, they expect resolution around the time of the Korea-U.S. summit later this month, potentially during or shortly after the Asia-Pacific Economic Cooperation (APEC) summit. Multiple requests for comment from the U.S. Trade Representative's office were not immediately returned.

Correction: An earlier version of this article misstated the proposed U.S. tariff reduction percentage. It would decrease from 25% to 15%, not 10%.