US Tariff Plans Threaten South Korea’s Trade Position

Seoul: The United States' plans to introduce new tariff levels for its trading partners are expected to present significant challenges for South Korea. The US intends to base these tariffs on various factors such as tariffs, nontariff barriers, and other trade-related policies, potentially disrupting established global trade practices. South Korea, in particular, may find it difficult to maintain a favorable trade position with the US under these new conditions.According to Yonhap News Agency, on Thursday, US President Donald Trump instructed his advisers to devise "reciprocal" tariff levels that account for factors including tariffs, taxes, subsidies, exchange rates, and other trade practices involving US products. Trump stated that this strategy aims to address what he terms "unfair" trade relations with other countries. However, experts are concerned that this new tariff policy could undermine longstanding tariff-setting practices negotiated through international organizations such as the World Trade Or ganization.Trump has indicated that the new tariffs will apply to all US trading partners without exceptions or waivers. With the US administration's study on the tariffs slated for completion by April 1, governments worldwide are expected to urgently seek improved trade deals with the US in the coming weeks.South Korea, with a trade surplus of $55.7 billion with the US last year, is seen as a likely target for the Trump administration's demands for more concessions. On Friday, Trump announced plans to unveil new tariffs on imported cars by April 2, a move that could significantly impact South Korea's automotive industry. Nearly half of South Korea's car exports went to the US market last year, benefiting from a bilateral free trade agreement that exempted them from tariffs.The proposed auto tariffs follow Trump's decision to impose 25 percent tariffs on steel and aluminum imports starting March 12. Other critical South Korean export items, such as semiconductors, may also be affected by higher trade ba rriers introduced by Trump.Initially, some South Korean officials and experts believed the country might largely avoid increased US tariffs due to the South Korea-US free trade agreement, which exempts 98 percent of bilateral trade items from tariffs. However, Trump's plan to implement reciprocal tariffs based on comprehensive factors has dispelled that optimism.In response, the South Korean government is working to communicate its position to US officials more effectively. On Saturday, Foreign Minister Cho Tae-yul met with US Secretary of State Marco Rubio during the Munich Security Conference in Germany. Rubio reportedly expressed confidence in South Korea's acting President Choi Sang-mok and welcomed efforts to enhance bilateral collaboration in the shipbuilding, semiconductor, and energy sectors.Despite the lack of direct communication between Trump and Choi, Rubio's comments suggest that South Korea still has an opportunity to negotiate cooperative trade relations by emphasizing its mutually benefi cial role.South Korea must marshal its diplomatic and economic resources to secure favorable negotiations with Washington before the new tariffs take effect. A key point to highlight is that South Korea reinvested an average of 96.2 percent of its trade surplus with the US back into the American economy from 2017 to 2020.Beyond the dispute over Trump's reciprocal tariffs, South Korea should explore every opportunity to underscore its economic and strategic value to the US to mitigate potential negative impacts.