Seoul: A former acting U.S. Trade Representative provided a grim outlook for South Korea's efforts to avoid sector-specific tariffs imposed by the Trump administration on steel, automobiles, and other goods. Stephen Vaughn, who served as acting USTR in 2017, noted that these tariffs are "extremely sensitive" for Americans from a national security perspective.
According to Yonhap News Agency, Vaughn made these remarks as Seoul continues to seek exemptions or relief from the sectoral tariffs, which could heavily impact South Korea's export-driven economy. The Trump administration, invoking Section 232 of the Trade Expansion Act of 1962, has imposed hefty tariffs on steel and aluminum and on automobiles and certain parts, citing national security concerns.
Vaughn emphasized the sensitivity of these tariffs for the U.S. and suggested that the Trump administration would be "very cautious" about granting more access to the U.S. market in these goods. He expressed skepticism about the possibility of lowering tariff rates for South Korea, as it would likely lead other nations, such as Japan and the EU, to demand similar treatment.
He further highlighted the challenges of reducing sectoral tariffs without setting a precedent for other countries. Vaughn suggested that South Korea might need to make offers that could be more appealing to the Trump administration than maintaining tariffs. He dismissed the notion that investment pledges would significantly aid South Korea in negotiations, describing such pledges as being in Korea's self-interest rather than concessions.
Vaughn advised that securing early trade deals with the U.S. might be beneficial, as the Trump administration could leverage the strong U.S. economy to negotiate more favorable terms. He mentioned that as the economy continues to perform well, the "price of the deals" is likely to increase, providing the U.S. with more bargaining power.
Despite the urgency for South Korea, Vaughn noted that the U.S. is not in a rush to conclude trade deals, as stated by U.S. Treasury Secretary Scott Bessent, who emphasized the importance of securing "high-quality" agreements. With the U.S. economy performing robustly, Vaughn suggested that the administration is in no hurry to finalize trade negotiations.
Vaughn also touched on the potential benefits of South Korea granting greater access to its market for U.S. agricultural products, noting that this could be a positive step in trade negotiations. He emphasized the U.S.'s interest in expanding its agricultural exports, including rice and beef.
Addressing broader economic concerns, Vaughn highlighted America's growing debts and the need for a rebalanced trade system. He warned that the U.S. cannot continue its current borrowing practices and called for surplus countries to consider rebalancing the trade system to ensure economic sustainability.