The agreement that Japan secured has added pressure on South Korea to defuse the threat of high tariffs on its exports to the United States.

Automakers like Hyundai and Kia are facing a significant impact if South Korea doesn’t secure a trade deal with the U.S. by August 1.

Less than two months into his presidency, South Korean leader Lee Jae Myung is facing an early diplomatic and economic test, as his top negotiators struggle to make headway in trade talks with the US before higher levies kick in next week.