Synopsis
As South Korea contends with Donald Trump's impending tariff measures, experts recommend increasing imports of US energy and emphasizing cooperation in key sectors as negotiation leverage. The Seoul government is addressing concerns over trade imbalances and tariffs on vital exports.Key Takeaways
- Seoul should enhance energy imports from the US.
- Trump's tariffs may impact South Korea's trade economy.
- Average tariff on US imports is only 0.79%.
- South Korea's trade surplus with the US was $55.69 billion in 2024.
- Bilateral cooperation in shipbuilding can help negotiate better terms.
Seoul, March 6 (NationPress) In light of US President Donald Trump's impending comprehensive tariff strategy and escalating pressure on various sectors and the economy, South Korea must enhance its imports of American energy and underscore potential collaboration in critical areas for the US as negotiation leverage, experts stated on Thursday.
Amid worries regarding the effects of Trump's new tariffs on its trade-resilient economy, South Korea is striving to obtain tariff exemptions. The U.S. intends to impose a 25 percent tariff on all steel and aluminum imports starting Wednesday.
Washington is set to implement "reciprocal" tariffs next month to align with duties imposed by other nations on U.S. exports. Additionally, it plans to introduce tariffs on cars, semiconductors, and pharmaceuticals — key export products for South Korea, as reported by Yonhap news agency.
During his address to a joint session of Congress on Tuesday, Trump claimed that South Korea's average tariff rate is four times that of the U.S., despite the U.S. providing "significant military and other assistance" to South Korea.
"We should not overreact to Trump's statements, as they seem more directed at domestic audiences rather than a direct demand for South Korea," commented Cho Seong-dae, a senior researcher at the Korea International Trade Association (KITA).
The Seoul government has countered this assertion, stating that the average tariff rate on American imports was 0.79 percent as of last year, under the bilateral free trade agreement (FTA) between Seoul and Washington.
"However, we must prepare to respond thoroughly to any specific requests. The time has come for the government and industries to strategize their negotiation tactics," Cho added.
Given the Trump administration's dissatisfaction with the U.S. trade deficit with South Korea, experts recommend that the Seoul government take measures to tackle the short-term trade imbalance.
"We can also procure more energy, semiconductor manufacturing equipment, aircraft, and military goods from the U.S. We should stress that the Seoul government is actively addressing these trade surplus concerns," advised Jang Sang-sik, a KITA official.
South Korea's trade surplus with the U.S. reached a historic high of $55.69 billion in 2024, marking the largest surplus with America's major trading partners for the second consecutive year.
Concerning the CHIPS and Science Act, experts urged efforts to ensure that South Korean firms uphold their investment commitments, which would help mitigate the U.S. trade deficit and generate more jobs.
Samsung Electronics, SK hynix Inc., and other local companies have increased investments in the U.S. and are expected to receive grants. However, Trump has called for the repeal of the CHIPS and Science Act, labeling it as "horrible".
"The U.S. trade deficit is anticipated to shrink once South Korean firms commence operations at their manufacturing plants in the U.S. and enhance production there. We need to emphasize that a stable business environment is vital for ongoing corporate investments in the U.S.," remarked Han Ah-reum, a KITA researcher.
"We should actively pursue ways to strengthen bilateral collaboration in sectors where the U.S. has long-term interests, such as the shipbuilding industry. This can serve as a valuable negotiating tool to alleviate trade pressures," suggested Kim Tae-hwang, a professor at Seoul's Myongji University.
