Seoul: South Korea may soon face pressure from U.S. President Donald Trump to reduce or eliminate its trade surplus with the United States, according to a former senior U.S. Trade Representative (USTR) official. Michael Beeman, who served as assistant USTR during the first Trump administration, emphasized that addressing the trade imbalance between the two countries would likely be a "very top priority" for a potential second Trump administration.
According to Yonhap News Agency, Beeman noted that Trump might demand a renegotiation of the South Korea-U.S. free trade agreement (KORUS FTA) to address the ongoing trade imbalance. Beeman, who led the first renegotiation of the KORUS FTA in 2017-2018, remarked on the uncertainty of whether the new Trump administration would focus on traditional trade agreements or other types of deals, such as tariff or investment agreements.
South Korea's exports to the United States increased by 10.5 percent to $127.9 billion last year, resulting in a record surplus of $55.7 billion for 2024, marking an increase of 25 percent from the previous year. Beeman asserted that the new Trump administration would view this trade imbalance with "great concern," aligning with Trump's "America First" trade policy aimed at addressing perceived unfair trade practices and trade deficits.
On his first day in office, Trump signed executive orders similar to those from his initial term, including a review of trade agreements like the U.S.-Mexico-Canada Agreement (USMCA) for potential amendments. Beeman anticipates that many trade issues during a second Trump administration may mirror those from the first term, but with a more aggressive approach.
Beeman indicated that while Trump has not explicitly mentioned the KORUS FTA, the agreement could come under scrutiny if the U.S. seeks to blame it for the growing trade deficit. He believes the issue of reducing the trade deficit with Korea would be a top priority.
He advised South Korea to take proactive steps to address U.S. concerns, suggesting increased purchases of U.S. energy, military equipment, automobiles, and other manufactured goods. Additionally, Beeman recommended that South Korean companies expand their production within the U.S. to mitigate uncertainties, highlighting that new investments in the U.S. would likely be welcomed.