15% Tariff Era.

• A tariff agreement with the U.S. has been reached. General tariffs were reduced from 25% to 15%, and auto tariffs were also set at 15%.
• Chosun Ilbo’s front-page headline declared, “The urgent fire has been put out,” while its editorial noted, “A major hurdle has been overcome.” Hankook Ilbo praised, “We defended the 15% tariff.” Hankyoreh also commented, “Economic uncertainty has been reduced.” Dong-A Ilbo warned in its editorial, “A much bigger hurdle awaits at the summit in two weeks.”
• Rice and beef will not be further opened. The export of Google Maps was also a contentious issue but was excluded for now.
• The Korean government has agreed to invest $350 billion in the U.S. A shipbuilding cooperation fund accounts for $150 billion, and an investment fund for semiconductors, bio, nuclear, and secondary batteries totals $200 billion.
• Separate from the $350 billion, Korea will purchase $100 billion worth of U.S. LNG and crude oil over four years.
• In two weeks, Lee Jae-myung (President) will visit the White House to meet Donald Trump (U.S. President). The issues of defense budget increases and defense cost-sharing, which were excluded this time, are likely to be on the table. The situation remains tense.
• Related Link.
• Related Link.
• Related Link.
• Related Link.
• Related Link.

“A Decent Job,” Many Say.

• Kang Sung-jin (Professor at Korea University) assessed it as “a negotiation where we did our best, considering the $350 billion investment, entry into shipbuilding, and decent results in agriculture and livestock.”
• Kang In-soo (Professor at Sookmyung Women’s University) also evaluated it as “a potential opportunity compared to Japan and Europe.”
• Kim Yang-hee (Professor at Daegu University) remarked, “The agreement level is not inferior to Japan’s, so we avoided the worst, but it’s regrettable that we received 15% when it should have been duty-free as an FTA country with the U.S.”
• Nam Si-hoon (Professor at Myongji University) stated, “We must defend well as unreasonable demands could arise at the Korea-U.S. summit.” He advised, “In trying to clarify details, we might end up at a disadvantage, so some aspects should be strategically left ambiguous.”
• Related Link.
• Related Link.

Better Terms Than Japan.

• Last year, South Korea recorded a $66 billion trade surplus with the U.S., while Japan had a $68.5 billion surplus.
• Japan decided to invest $550 billion at a similar scale, but South Korea secured a better deal.
• Japan’s GDP is 2.5 times that of South Korea. In terms of GDP ratio, South Korea is at about 20%, while Japan is around 13%.

Trump Was Surprisingly Friendly.

• We expected ministerial talks, but Trump showed up himself. The meeting lasted about 40 minutes.
• Yeo Han-gu (Head of Trade Negotiations) said, “It’s rare for anyone other than the President or Prime Minister to negotiate directly. Meeting with a ministerial delegation shows respect and importance towards Korea.”
• Howard Lutnick (U.S. Secretary of Commerce) reportedly provided significant assistance. Kim Jong-gwan (Minister of Trade, Industry and Energy) said, “He advised us on how to respond every time we met.”
• “There was a process where the amount went up and down,” he added. It was emphasized that there is a significant difference in economic scale with Japan.
• Related Link.

“Let’s Not Sin Against History.”.

• This is what Lee Jae-myung reportedly said to Kang Hoon-sik (Presidential Chief of Staff). Right after the negotiation concluded, Lee Jae-myung remarked, “My teeth were about to fall out.”
• Kim Yong-beom (Presidential Policy Chief) stated, “I’ve never seen the President focus on anything as much as this.”
• Kang Yoo-jung (Presidential Spokesperson) once said, “It’s safe to say he’s receiving reports around the clock.”

Car Tariffs Disappoint.

• Compared to pre-Trump days, Korea’s tariffs went from 0% to 15%, while Japan’s rose from 2.5% to 15%, making the price burden relatively heavier for Korea.
• According to Hana Securities, Hyundai Motor and Kia must bear tariffs of 10.5 trillion won and 6.3 trillion won, respectively.
• Hyundai Motor plans to increase local production in the U.S.
• As of 2023, Hyundai and Kia’s overseas production ratios are 55% and 44%, respectively, with a high likelihood of further increase.
• Lee Hang-gu (Korea Automotive Research Institute Advisor) remarked, “There’s a high chance domestic production will decrease,” adding, “It’s clear the automotive industry, which struggles even with a 1% cost reduction, is facing a significant burden.”
• Related Link.
• Related Link.

The Mad Cow Protest Photo Was the Hidden Card.

• When beef became the agenda, Yeo Han-gu presented photos from the 2008 mad cow disease protest that he had prepared in advance. Yeo emphasized the sensitivity of the agricultural and livestock industry, noting, “It’s a government that’s only 50 days old, and I think this aspect was effective.”
• During negotiations, Kim Jeong-gwan and Yeo Han-gu even followed Rutnik to Scotland when he left with Trump. It was a turning point in winning Rutnik’s favor.
• They created a large panel, 1 meter by 1 meter, summarizing the ‘MASGA (Make American Shipbuilding Great Again)’ project, which reportedly had a good effect. An anecdote was shared that when they showed it to Rutnik in advance, he said, “Great idea.” They were advised to “keep impressing Trump to make him feel respected.”
• They also made 20 ‘MASGA’ caps.
• Related Link.
• Related Link.

Not an End, but a New Beginning.

• Though capped at 15%, the new tariffs are a blow to export-reliant South Korea. The aftermath will be significant.
• The Kyunghyang Shinmun editorial stressed, “We must prepare support measures for affected sectors, innovate industrial structures, and reduce reliance on the U.S. by exploring global markets.”
• The JoongAng Ilbo editorial warned against excessive self-praise, stating, “Calling it a successful negotiation is premature. The real challenge is securing tangible benefits during implementation.”
• The expansion of Korean companies into the U.S. is an unavoidable trend in the global supply chain reorganization, but it raises concerns about domestic industrial hollowing.
• Related Link.
• Related Link.

Stable Exchange Rates Boost Stock Prices.

• During tariff negotiations, the won-dollar exchange rate hit 1,354, rose to 1,393, and dropped to 1,387 yesterday. Observers suggest stability will return once uncertainties clear.
• A 10-won drop in the exchange rate led foreign investors to buy 1 trillion won in the stock market. Even if stock prices remain flat, currency gains are possible.
• Foreigners sold 15.6 trillion won by April this year but bought 9.7 trillion won by July. They’ve replenished about 62%, indicating further buying potential.

Brazil at 50%.

• Not every country has it easy. India is set at 25%. Canada is in talks for 35%, and Mexico for 30%.
• Trump even made comments bordering on interference, claiming Jair Bolsonaro (former Brazilian President) is being oppressed in Brazil.

What Matters Now.

Yoon’s Corporate Tax Cut Reversed.

• The top corporate tax rate will be raised from 24% to 25%.
• The threshold for major shareholders subject to capital gains tax will revert from 5 billion won to 1 billion won.
• A new top rate for the education tax has been established. It was 0.5% on insurance and deposit interest income, but 1% will apply if it exceeds 1 trillion won.
• The securities transaction tax will increase from 0.15% to 0.2%.
• The top dividend income tax rate will be reduced from 45% to 35%. This applies to companies with a payout ratio of 40% or more, or those with a payout ratio of 25% or more that have increased dividends by over 5% compared to the average of the previous three years.
• Expenditures have also been cut. 16 items will be terminated or reduced. A reduction of 4.3 trillion won is expected over five years.
• The Ministry of Economy and Finance projected that the tax reform plan announced yesterday will increase tax revenue by 35.6 trillion won over five years. Corporate tax will account for 18.5 trillion won, and securities transaction tax for 11.5 trillion won.
• Related Link.

Income Tax Left Untouched.

• Despite significant cuts, the tax reduction under the Yoon administration falls short. The National Fiscal Institute projected a tax cut effect of 79 trillion won over five years post-Yoon. Seung-hoon Jeon (Professor at Daegu University) stated, “The managed fiscal deficit, including the supplementary budget, is expected to exceed 100 trillion won this year,” adding, “A government committed to active fiscal policy should begin discussing substantial increases in major tax categories like income, corporate, and value-added taxes.”
• Related Link.

They Didn’t Touch the Comprehensive Real Estate Tax.

• People’s Solidarity for Participatory Democracy warned, “Neglecting or worsening asset taxation will invite criticism for accelerating inequality and polarization.”
• Lee Sang-min (Research Fellow at the National Assembly Budget Office) noted, “Efforts to increase tax revenue are positive,” but pointed out, “If the goal is to direct limited resources to more productive areas, it’s necessary to focus on raising real estate holding taxes.”
• Related Link.

“Studied Really Hard.”.

• Kim Yong-beom said this: “I’m quite the fund person myself, but we included far more safety measures, like having the Financial Services Commission Chairman join us and a trade lawyer sit in. It’s the result of a lot of analysis.”
• According to Kim Yong-beom, the $200 billion investment fund uses a Capital Call method. Instead of gathering the total amount at once, it raises some funds and invests them as needed.
• In fact, they used the phrase “less than 5% equity,” filling the rest with loans and guarantees. Ultimately, the shipbuilding industry is a cooperative fund, and the remaining $190 billion is like the U.S. borrowing money from Korea to invest in itself.
• Kim Yong-beom said, “No one knows the exact investment scale, and it’s better to keep it vague.”

Deep Dive.

Energy Imports: A Separate $100 Billion.

• Last year, South Korea’s total energy imports amounted to $137.2 billion. Crude oil and LNG imported from the U.S. were worth $22.4 billion.
• Over four years, $100 billion is slightly more than the usual import volume. Shifting imports from the Middle East to the U.S. could increase costs significantly.

The Meaning Behind “America Takes 90% of the Profits”.

• Howard Lutnick said it.
• Kim Yong-beom stated, “The U.S. side hasn’t clearly explained the exact meaning,” adding, “We understand it as profits being reinvested or retained within the U.S.”
• Trump declared, “The U.S. will own and control it, and I will personally select it.”
• “In a normal civilized country, a structure where 90% of profits are unilaterally taken is hard to justify,” he added, “We don’t understand it that way, and we shared such expectations with the U.S. in advance.”
• While tariff negotiations were crucial, specific discussions weren’t held, but the U.S. negotiation team reportedly emphasized ‘risk-free.’
• Kim Yong-beom explained, “It seems to be a concept of reinvesting profits back into the U.S.” The explanation is that Trump selects good businesses, the U.S. government provides purchase guarantees, and profits are reinvested. The specific structure of the fund hasn’t been discussed. It will take quite some time, and there will be opportunities for the Korean government to express its views.

End of the US-Korea FTA Era?

• With the collapse of free trade frameworks, an era of reciprocal tariffs driven by power has begun.
• Kim Yong-beom remarked, “Looking at various negotiations since April 1, the FTA and WTO systems are unfolding in entirely different ways,” adding, “I understand that the system itself is changing significantly.”
• Jung Ha-neul (Director of the Institute for International Legal Order) pointed out, “We must see the U.S. as having departed from the multilateral free trade system,” noting, “They are in the process of creating a new trade order centered on American interests.”
• Related Link.

Another Take.

Will Tax Cuts Lead to More Dividends?

• Why are dividends so low in the Korean stock market?
• Lee So-young (Democratic Party lawmaker) believes it’s because major shareholders face hefty taxes.
• From a major shareholder’s perspective, it’s “my company” anyway, so there’s no reason to boost dividends to raise stock prices. In fact, lower stock prices mean less capital gains tax later.
• The dividend income separate taxation led by Lee aims to incentivize major shareholders to increase dividends. If dividend income is 10 billion won, currently 4.5 billion won goes to taxes, but if the reform passes, it will drop to 3.5 billion won.
• Jin Sung-joon (Democratic Party lawmaker) disagrees. He sees the proposal to cut taxes and increase dividends as a tax cut for the wealthy. Currently, the top 0.1% of stock investors take 46% of dividend income. Expand that to the top 1%, and it’s 67%. And we want to cut their taxes?
• Jin Sung-joon: “While small investors earn just a few thousand won, a handful of conglomerates reap tens of billions. Is this fair?”
• Lee So-young: “The taxes paid by major shareholders like those of Samsung Electronics may decrease, but if dividends increase, overall tax revenue could rise by hundreds of billions of won.”
• Related Link.

Hunger Doesn’t Justify Humiliation.

• Israel is air-dropping food into Gaza.
• Despite having land routes for aid delivery, they insist on parachuting over 450kg food boxes, drawing criticism as a publicity stunt. A single plane can drop up to 14 tons of aid, while a truck can carry 25 tons.
• In Israel, seven people starve to death daily. So far, 154 have died from malnutrition, 89 of whom are children. 470,000 are starving.
• A Gaza resident posted on Instagram: “This type of aid is inefficient and humiliating. Just because we’re hungry doesn’t mean we should endure humiliation.”
• Related Link.
• Related Link.

U.S. Fed Holds Rates Steady for Fifth Time, What About the Bank of Korea?

• The situation has become more complex. Some interpret it as hawkish tightening. Trump is pressuring for lower rates, but Jerome Powell (Federal Reserve Chair) emphasizes inflation concerns.
• The U.S. held rates, but Korea, with rates 2 percentage points lower, faces pressure not to cut. A widening gap could lead to foreign capital outflow and a decline in the won’s value. It might also pour fuel on the stabilizing real estate market.
• Park Sang-hyun (IM Securities Senior Analyst) analyzed, “A weaker won could help offset U.S. tariffs, enhancing competitiveness.”
• Related Link.

The Fix.

Hot Earth, Days When Nuclear Plants Can’t Run.

• Nuclear power plants use seawater for cooling. According to Korea Hydro & Nuclear Power’s analysis, Shin-Wolsong Units 1 and 2 might have to halt operations by 2030. This is because warmer seawater reduces cooling efficiency.
• The design seawater temperature varies by plant. Shin-Hanul Units 1 and 2 are designed for 31°C, while Kori Unit 2 is at 36.1°C. Shin-Wolsong Units 1 and 2 are designed for 31.5°C, but temperatures have already risen to 30.6~31°C.
• There is also analysis suggesting that up to eight nuclear plants might need to stop within a decade.
• Son Jae-min (Kyunghyang Shinmun Social Editor) pointed out, “We need to question the formula that more electricity is needed in the capital area, and that more nuclear plants and transmission towers should be built in rural fields and mountains.” The power reserve margin reaches 10%. “We need to change the assumption that more electricity is needed in the capital area,” he argues.
• Related Link.
• Related Link.

How About a Law School at the Open University?

• Among the 2,156 new law school students for the 2023 academic year, 54% were from SKY universities (Seoul National University, Korea University, and Yonsei University). Over two-thirds of regional law school admittees came from universities in the Seoul metropolitan area, and from 2011 to 2017, 18% of the 336 individuals appointed as prosecutors were graduates of foreign language high schools.
• Cho Hee-yeon (former Seoul Metropolitan Office of Education Superintendent) proposed, “Law schools should not become a modern-day version of the old aristocratic system. Let’s establish a law school at the Open University to lower the barriers and create pathways for diverse social classes to enter the legal profession.”
• “The key is to breathe life into a social structure that solidifies through monopolization. Society inherently tends toward monopolization. Democracy, with its ‘one person, one vote’ principle, continuously battles the established monopolistic system, striving for equality. (Omitted) We must pool our collective wisdom to expand the base for training legal professionals and create meaningful changes that open up democracy. Isn’t that the path to a rule-of-law state where citizens are the true sovereigns?”
• Related Link.

ICYMI.

29.3°C: Hottest Night in 117 Years.

• Seoul broke its meteorological record. The tropical night continued for the 23rd day.
• A humid heatwave is forecast for next week. It may rain, but the perceived temperature could rise further.
• Related Link.

Insurrection Conspiracy, Lee Sang-min Arrested.

• Accused of ordering the police and fire departments to cut off electricity and water to media outlets on Yoon Seok-yeol’s (then President) command. The special prosecutor deems it an act of constitutional disorder, infringing on press freedom and public safety.
• Lee Sang-min (former Minister of the Interior and Safety) claimed at the Constitutional Court’s impeachment trial that he “saw the documents mentioning power and water cuts from afar,” but CCTV footage confirmed him holding the documents.
• A junior from Yoon Seok-yeol’s high school and considered a key member of the emergency martial law group.
• Related Link.

Yoon Seok-yeol’s Arrest Warrant Executed Today.

• After two failed attempts at detention in the detention center, a warrant requested by the special prosecutor was issued.
• Yoon Seok-yeol submitted a medical certificate and opinion, but Moon Hong-joo (Special Prosecutor) stated, “I understand there are no significant health issues.”
• Related Link.

6.5%: Largest Increase in Median Income Standard.

• The median income standard for a four-person household will rise from 6.09 million won to 6.49 million won. As this standard is used to determine welfare benefits, an increase means broader welfare coverage.
• From next year, single-person households eligible for livelihood benefits will receive 820,000 won monthly. For a four-person household, it’s 2.08 million won.
• Related Link.

More Government Ads on YouTube?

• The government advertising budget for 2023 is 1.337 trillion won annually. During a Cabinet meeting, the Ministry of Culture, Sports and Tourism was instructed to “consider the efficiency of media targeted by government ads.”
• Print and TV each account for 20% and 25%, while portals and other internet platforms take up 25%, and outdoor ads 18%.
• There is speculation that some government ads will be allocated to YouTube and internet media. Chosun Ilbo analyzed that YouTube channels like News Factory and Maebul Show are likely to be included.
• Related Link.

Worth Reading.

No Loyalty Survives Prison.

• It’s about the betrayal of Yoon’s close aides. Kim Tae-hyo (then Deputy Director of the National Security Office) and Cho Tae-yong (former Director of the National Security Office), who were present at the so-called VIP fury scene, belatedly confessed the truth. Yoon Sang-hyun (People Power Party lawmaker) and Kim Sung-hoon (former Deputy Director of the Security Office) also changed their stance.
• For Park Geun-hye (former President) and Chun Doo-hwan (former President), the betrayal of close aides was also decisive.
• Jung Young-oh (Korea Times Editorial Writer) commented, “It is reaffirmed that even aides who acted like a tongue in the mouth will try to protect themselves when facing punishment, an eternal truth.”
• Related Link.

Why Security Is Missing from Tariff Talks.

• Kim Jong-dae (former Justice Party lawmaker) warned, “The reality is much more complex and threatening.”
• The U.S. Department of Defense, White House, and trade lines operate on parallel tracks. While tariff negotiations have concluded, issues like defense cost-sharing and the U.S. military presence in Korea haven’t even begun.
• The U.S. aims to turn its allies into strategic outposts against China. It’s likely to plant drones and long-range missiles, controlling them remotely from the mainland or allied bases.
• Kim Jong-dae emphasized, “We must develop the power to determine our own fate for survival.”
• Related Link.

Invitation for Supporting Members Event.

• A few spots are still available.
• Join us for a discussion on the future of news, exclusively for Slow News supporters.
• August Media Monthly, co-hosted by Media Today and Slow News. Lee Jeong-hwan (CEO of Slow News) will present on “AI and Journalism: New Rules of the Game.”
• In an era where search is obsolete and links vanish, how will journalism function?
• How will the production and distribution of news change? It’s time for fundamental questions.
• When algorithms judge news value and set priorities, where does the human journalist’s edge lie?
• Lee Jeong-hwan (CEO of Slow News) will brief on key topics from the recent Asia Journalism Forum in Taiwan.
• Discussing Korea’s unique situation, global shared crises, imminent changes and shocks, possibilities and opportunities, and the essence of it all.
• Talk Show: AI and Journalism, New Rules of the Game.
• Presentation: Lee Jeong-hwan (CEO of Slow News).
• Discussion: Lee Hee-jeong (CEO of Media Today).
• Date: Thursday, August 7, 2025, at 7 PM.
• Venue: Hongdae Entrance Dali Small Theater.
• Supporting members of Slow News and Media Today are invited free of charge.
• Non-supporting members will have a participation fee.
• Registration link: https://forms.gle/FJYpC3LuizaR6qWR6
• Related Link.