June 16 (Bloomberg) -- South Korean President Lee Myung Bak's government is in crisis four months into his presidency, amid public anger over U.S. beef imports and a drivers' strike that has brought the country's ports to a near standstill.

``President Lee has lost the public's trust and is facing enemies in every direction,'' Choi Jin, head of the Institute of Presidential Leadership in Seoul, said in an interview. ``He needs drastic changes for himself and his administration as soon as possible.''

Support for Lee has plunged by more than half since he took office in February after winning a landslide victory in December. Anger at his decision to resume importing U.S. beef -- which triggered near-80,000-strong street protests in Seoul -- has grown as fuel and food prices surge, threatening his ability to push through the economic-growth agenda on which he campaigned.

``Protests have now moved beyond the U.S. beef issue, and have mutated to an overall criticism of President Lee,'' said Sohn Hyuk Sang, a professor at the Graduate School of NGO Studies at Seoul's Kyunghee University. ``He asks us to follow blindly, without question, and seems not to realize he did anything wrong. This does not sit well with the majority of the public.''

Lee's administration announced in April, in mid-leg of his U.S. tour, that South Korea would resume American beef imports. Lee agreed to lift the ban, imposed to prevent the possible spread of mad cow disease, to win support from U.S. lawmakers for a wider free-trade accord.

Street Protests

The resulting public backlash triggered daily candle-lit vigils demanding Lee's resignation. Last week his entire cabinet, led by Prime Minister Han Seung Soo, offered to step down to take responsibility for the government's handling of the issue.

An umbrella organization known as AntiMadCow is planning a rally tonight in downtown Seoul. They may be joined by truck drivers who have gathered in the capital from across the country to hold a separate demonstration.

South Korean Trade Minister Kim Jong Hoon is in the U.S. for talks with U.S. Trade Representative Susan Schwab to try to resolve the imports issue.

``We will stick to the (April) agreement but at the same time, there will be certain ways of making it easier for the Korean consumers to be enjoying U.S. beef,'' Ahn Ho Young, South Korea's deputy minister for trade, told Bloomberg Television today in Kuala Lumpur.

Ports Paralyzed

In another threat to Lee's government, container traffic at the nation's ports including Busan, the biggest, has slumped to 18 percent of normal levels because of disruptions caused by truckers seeking higher fees to cover surging fuel costs.

Han said today shippers should agree to some requests from striking truckers to end a the dispute that he said may cause ``tremendous damage'' to the nation's economy. Exports are the main driver of the nation's economic expansion, in its 10th consecutive year.

``We hope shippers will accept the truckers' demands to some extent to resolve this soon,'' Han said, according to an e-mailed statement from his office. ``The disruption in cargo shipments at Busan port will cause tremendous damage to our economy.''

Truckers represented by the Korea Cargo Workers Union, most of whom are self-employed, stopped moving freight nationwide from June 11. The dispute has affected $1.69 billion of exports and $1.78 billion of imports as of yesterday, according to the Ministry of Knowledge Economy.

Construction Halted

Drivers in the construction industry have also walked out, causing work at more than 90 percent of the country's building sites to stop, the Korea Construction Workers Union said in an e- mailed statement today.

A truckers' strike in 2003, which lasted almost two weeks, inflicted about 540 billion won ($520 million) of losses on the country, according to the Prime Minister's Office. The dispute also dented long-term traffic growth at Busan as some shipping lines opted against using the port for trans-shipments.

``We lost cargo to ports in Japan and China'' because of ``falling credibility,'' Han said in the statement.

Hyundai Motor Co., South Korea's biggest automaker, said yesterday that shipments of finished vehicles in the local market were only half the normal levels. Exports were largely unaffected. Truckers have also blocked gates at plants operated by Posco, the nation's biggest steelmaker.

The Korean Confederation of Trade Unions, an umbrella group, is also threatening a nationwide strike over Lee's policies including the resumption of U.S. beef imports, the privatization of state-run utility firms and surging inflation. The result of a vote is due today. Hyundai Motor workers have already voted to join the strike, its union, the nation's largest, said in a statement.

Lee is expected to make a public address some time this week, regarding the negative public sentiment over his administration. He will also announce a cabinet reshuffle.

``In receiving criticism, I have heard the sincerity of my critics,'' Lee told political rival Lee Hoi Chang, leader of the Liberty Forward Party, one of his harshest critics, during a meeting yesterday. ``I agree that we have to meet the public at their level and consider the people's sentiment.''

To contact the reporter on this story: Heejin Koo in Seoul at hjkoo@bloomberg.net; Seonjin Cha in Seoul at scha2@bloomberg.net.

Last Updated: June 16, 2008 04:01 EDT