How Does Korea Cope with U.S. President Trump Administration’s Tariff Policies?

Park Jong-won, deputy trade minister at the Ministry of Trade, Industry and Energy.

A Korean economic delegation and ranking government trade and commercial officials left for Washington DC as U.S. President Donald Trump’s tariff measures under the catchphrase “Make America Great Again(MAGA)” are taking shape.

It is the first time since the inauguration of President Trump’s second-term administration Korean delegation has made an official visit to the United State in the trade and commerce diplomacy perspective.

Some analysts said the government’s strategies to minimize the damage Korean companies suffer need to be reconsidered.

Chairman Chey Tae-won of the Korea Chamber of Commerce and Industry (KCCI) and other KCCI economic delegates are to make an official visit to Washington DC from Feb. 19 to Feb. 20.

Chairman Chey Tae-won of the Korea Chamber of Commerce and Industry (KCCI) delivers a speech at the Korea-US Business Night at the Library of Congress in Washington DC on Feb. 19. (Photos: KCCI)

The economic delegation comprises of representatives of core industries of Korean-U.S. economic cooperation, such as automobiles, semiconductors, steel, ship-building and energy.

The Korean economic delegation is scheduled to meet with ranking officials of the White House and major parliamentary members. Korea is to throw a dinner at the Thomas Jefferson Building of the Library of Congress on Feb. 19 with some 150 people, including members of the House of Representatives and the Senate and major cabinet members in attendance.

The Korean economic delegation plans to propose practical collaboration models between the two countries that could contribute to U.S. economy and society on top of ramping up bilateral industry cooperation while meeting with ranking officials of the White House and economic departments on Feb. 20, KCCI officials said.

“Specifically, expanding energy imports from the United States, cooperation in the shipbuilding industry, investing into automobiles and parts production facilities, development of next-generation nuclear power and cooperation in the small-modular reactor sector, and joint research and development on the building of semiconductor supply chains will be discussed,” they said.

The Korean government has dispatched Park Jong-won, deputy trade minister at the Ministry of Trade, Industry and Energy, to Washington DC. Deputy Trade Minister Park is to meet with U.S. administration officials and major lawmakers and stakeholders and discuss not only reciprocal tariffs and a 20 percent tariff against steel and aluminum, announced by President Trump, but also pending trade issues and ways of promoting economic cooperation.

MOTIE said Deputy Trade Minister Park will grasp U.S. major matters of concern and deliver Korea’s position, and he will ask for building a stable and uniformed policy environment so that Korean companies can carry out projects to invest into the United States in a seamless fashion.

Deputy Trade Minister Park is to explore ways of promoting cooperation with U.S. think-tank officials. He said the Korean government will make all-out efforts to protect Korean companies’ interests amid the rising policy uncertainties, caused by the U.S. administration’s announcement of a succession of trade measures.

As the private sector is intensifying activities toward the United States, some pundit said Korea needs to shift its response strategies. If the new trade and commerce environment is created, the United States will consider Korea as an important country, and the latter needs to make the most of the point.

In a report on major content of the U.S. MAGA trade policies and the direction of Korea’s responses, issued by the Korea Institute for Industrial Economics and Trade (KIET), Kyung Hee-kwon, a researcher, said Korea needs to look back on the fact that the Korean government has so far too much focused on analyzing bilateral trade relations between Korea and the United States and minimize Korean companies’ damage. Kyung called for widening the scope of research view for the designing of Korea’s new trade and commerce policy strategies.

Kim Sang-hoon, a senior researcher at KIET, said current evaluations of U.S. MAGA trade and commerce policies are too much concentrated on reducing short-term good trade deficit, but Korea has to take an approach considering the nation’s mid and long-term interests by persuading the United States based on its capabilities and values as the United States’ ally and exploring response rationale during trade negotiations with the Unites States.

Countries, including Korea are on the alert as U.S. President Trump has announced plans to import reciprocal tariffs and tariffs against semiconductors, automobiles, steel and aluminum.

They have been scrambling to come up with negotiation strategies as the imposition of the most tariffs is to take effect on April 1.

In particular, President Trump’s 2nd administration has included Korea’s steel and automobiles in the list of tariff targets as his first-term government did. Some pundits said Korea should take her cue from the negotiation expertise during President Trump’s first term.

At that time, the Korean had a track of successfully managing to wrap up big deals with the United States, such the revision of the Korea-U.S. Free Trade Agreement and the agreement of the steel quota system.

Former trade ministers Yoo Myung-hee and Yeo Han-gu, on the negotiation at that time, recommended that Korea needs to narrow the scope of negotiations and take a fast follower strategy by moving according to the process of negotiations with competition countries.