U.S. Treasury Secretary Bessent Meets South Korea’s Deputy Prime Minister to Discuss Minerals, Won Depreciation, and Trade Deal Implementation

The “critical minerals ministerial meeting” is a high‑level gathering of finance and economic officials hosted by the U.S. Treasury to coordinate how major economies will secure and diversify supplies of critical minerals (such as rare earths, lithium, nickel, cobalt) that are essential for clean energy, electronics, and defense industries. It is not a standing organization but a ministerial‑level meeting.
Typical attendees are finance ministers or equivalent senior economic officials from the G7 countries (United States, Canada, France, Germany, Italy, Japan, United Kingdom) plus invited partners such as Australia, South Korea, Mexico, India, and the European Union, along with a few U.S. economic agencies (e.g., the U.S. Trade Representative, Export‑Import Bank) and selected private‑sector experts.

A currency like the Korean won can depreciate (lose value against other currencies) when:
• Investors move money out of the country, for example because interest rates abroad (such as U.S. Federal Reserve rates) rise faster, making foreign assets more attractive.
• The country’s exports weaken or imports surge, creating trade or current‑account deficits and reducing demand for its currency.
• Markets expect slower economic growth, higher inflation, or financial instability in that country, which makes its assets less attractive.
• There is political uncertainty or geopolitical tension that increases perceived risk.
In practice, recent episodes of won depreciation have been linked to faster U.S. rate hikes than Korea’s, changes in global risk appetite, and concerns about growth, which encouraged capital outflows and selling of the won.

The Korea Strategic Trade and Investment Deal is a U.S.–South Korea agreement announced in 2025 that updates their economic relationship alongside the existing KORUS free‑trade agreement. It has two main parts:

1. Investment and tariffs:
   • Korea commits roughly US$150 billion of approved investment in U.S. shipbuilding and another US$200 billion in additional “strategic investments” (e.g., in shipbuilding, energy, semiconductors, pharmaceuticals, critical minerals, AI/quantum).
   • In return, the U.S. adjusts or reduces certain national‑security (Section 232) tariffs on Korean exports such as autos, auto parts, timber, some pharmaceuticals, semiconductors, and aircraft, and applies a more favorable “reciprocal tariff” schedule to many Korean goods.
2. Trade rules and market access:
   • Korea removes a cap that limited the number of U.S. cars that could enter without extra modifications and eases auto‑emissions paperwork.
   • Both sides pledge to tackle non‑tariff barriers in food and agriculture, protect digital trade and cross‑border data flows, strengthen intellectual‑property and competition‑law protections, and cooperate on labor rights, forced‑labor prevention, and environmental enforcement (including fisheries‑subsidy rules).
   The deal is implemented through changes to U.S. tariff schedules and by incorporating these commitments into the KORUS FTA joint committee process.

Koo Yun Cheol is South Korea’s Deputy Prime Minister (for economic affairs) and Minister of Economy and Finance. He is a senior cabinet official who:
• Leads the Ministry of Economy and Finance, which is responsible for national economic policy, fiscal policy and budgeting, tax policy (with other agencies), and managing government debt and foreign‑exchange policy.
• Coordinates overall macroeconomic strategy, including growth, employment, and structural‑reform policies, often chairing or participating in key economic committees.
• Represents Korea in international economic and financial meetings (such as the critical minerals ministerial, G20‑related events, and bilateral talks with other finance ministers).
His official biography notes his appointment as Deputy Prime Minister and Minister of Economy and Finance in July 2025.

When the Secretary said Korean industries “support America’s economy,” he was almost certainly referring to South Korea’s major export and investment sectors that are deeply integrated with U.S. manufacturing and technology supply chains, especially:
• Semiconductors and electronics (memory chips, displays, components used in U.S. tech and AI industries).
• Automobiles and auto parts (Korean carmakers that produce and invest heavily in plants in the United States).
• Shipbuilding, batteries, and clean‑energy equipment (including EV batteries and related materials).
Korean government and trade documents highlight these as core industries in Korea’s exports and investment into the U.S. and as focus areas under the Strategic Trade and Investment Deal.

“Full and faithful implementation” of a trade and investment deal means that both countries not only pass the necessary legal and regulatory changes but also apply them consistently in day‑to‑day practice. In concrete terms for the Korea Strategic Trade and Investment Deal, this includes:
• The United States actually modifying its tariff schedules and Section 232 measures as promised, and administering customs so Korean exports receive the agreed‑upon tariff treatment.
• Korea enacting and enforcing the agreed regulatory changes (for autos, agriculture, digital services, competition law, IP, labor, and environmental rules), and government agencies treating U.S. firms in line with those commitments.
• Both governments using the KORUS Joint Committee and other mechanisms to monitor compliance, address disputes, and ensure that investment commitments and market‑access promises are carried out over time, not just announced.
This goes beyond signing the deal and requires ongoing policy follow‑through, enforcement, and transparent consultation when problems arise.