South Korea has shown interest in a trade deal after the 8 July deadline, as noted by trade chief Ahn Duk-geun. Key topics for discussion with the U.S. focus on the auto and steel industries. Currently, a negotiation framework is in place, with a ministerial-level meeting scheduled for mid-June. However, these trade talks might face delays due to South Korea’s presidential election on 3 June. Major trade discussions are expected to advance after the election period. The fact that South Korea is open to an agreement beyond the 8 July deadline indicates flexibility in timelines if beneficial outcomes are possible. Ahn’s comments reflect a readiness to adjust, especially if important sectors like automobiles and steel receive appropriate attention from their U.S. counterparts. These industries are significant in domestic politics and economics. With discussions formally set and a high-level meeting planned for mid-June, the path for making decisions is clear. However, the upcoming election on 3 June may cause a delay or increased caution. New leadership, or even rumors of it, often leads to changes in policy approaches. This situation will likely cause a temporary adjustment in administrative processes, affecting the timing of negotiations. Trusted analysts believe that momentum will not pick up until the political processes are complete, and we agree. The energy needed for making deals will likely return once the election confusion settles. There’s a reason businesses wait for vote results before moving forward. This situation suggests limited immediate changes. However, low participation can exaggerate market movements. The mid-June meeting and early July deadline could cause stress points due to contract rollovers or position closures. Choi, who has previously managed steel agreements in similar trade talks, may reappear after the election. If he does, the outcomes from last year’s discussions might resurface, not as new issues, but as previously set-aside topics needing urgent attention. Lee, who has been quiet during recent discussions, is another figure to monitor if talks restart post-deadline. He typically values careful framing over speed, so if he engages again, expect detailed procedural requests. His involvement could provide clarity for market participants, especially if existing tensions are to be addressed in future meetings. In the meantime, it might be wise to hedge against inaction instead of volatility. The focus will likely not be on new information, but rather on a gradual return to discussions. Flat volatility curves might briefly invert if political statements are misunderstood after the election. Most activities tend to stay low during this kind of gap. So, the advantage might lie in tracking when liquidity returns, rather than trying to predict outcomes. Pay attention to statements from legislative aides and small shifts in industry language over the next two weeks—they may reveal more than the ministers themselves during this time. Ultimately, we find ourselves in a situation where prices react more to expectations than actual policies. This will continue until official schedules align, allowing officials to communicate without the need for neutrality.

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