21 hours Ago By Korea Bizwire
From Ally to Target? South Korea Grapples With Fallout of Trump’s Tariff Push (Image created by AI/ChatGPT) SEOUL, April 3 (Korea Bizwire) — U.S. President Donald Trump’s announcement on “reciprocal” tariffs Wednesday appears to have put South Korea deeper into a soul-searching mode over its growing reliance on the United States for trade, as the protectionist move further jeopardized the fate of a bilateral free trade agreement (FTA).
Trump announced a 10 percent “baseline” tariff on imports from all trading partners and “reciprocal” tariffs, including 25 percent duties for South Korea — a culmination of his drive to curtail America’s trade deficits, boost revenue, attract foreign investments and strengthen domestic manufacturing. The baseline and reciprocal tariffs are set to go into effect Saturday and next Wednesday, respectively, as Trump has repeated his vow to rectify what he called “unfair” foreign trade practices that have “ripped off” America for too long. For South Korea’s export-reliant economy, new U.
S. duties, including planned 25 percent tariffs on imported cars and parts, are raising the nettlesome questions about how to rebalance the trade relationship with the United States potentially under a new deal and avoid unforeseen consequences of economic interdependence. The tariff announcement also added to uncertainties over the future of the increasingly multifaceted South Korea-U.
S. relationship at a time when Seoul has been in a period of political flux caused by President Yoon Suk Yeol’s short-lived martial law imposition and his impeachment in December. With a chart showing individualized reciprocal tariffs at a White House event, Trump depicted the new duties as “kind” and “common sense,” claiming the U.
S. will impose just half the rate each targeted country was supposed to pay. The chart presented 34 percent reciprocal tariffs for China, 20 percent for the European Union, 46 percent for Vietnam, 32 percent for Taiwan, 24 percent for Japan, 26 percent for India, 36 percent for Thailand, 31 percent for Switzerland, 32 percent for Indonesia, 24 percent for Malaysia, 49 percent for Cambodia and 10 percent for Britain.
“Our Asian FTA partners were not spared with Korea’s rate at 25 percent at the high end of the group,” Wendy Cutler, vice president of the Asia Society Policy Institute and former negotiator of the South Korea-U.S. FTA, said in a statement.
“Asian countries in particular have been hard hit, causing them sharp economic pain given their export-driven economies. While the president has underscored that he could have charged a lot more, our partners will not view his actions today as ‘kind.’” Cutler predicted U.
S. trading partners will be under domestic pressure to respond while helping their companies weather the tariff storm. “We can expect global economic growth to start plummeting as trade flows decline, prices increase and businesses put off investments,” she said.
“Foreign delegations are likely to be all over Washington trying to secure exceptions.” A drone view shows containers at the Port of Baltimore in Maryland on April 2, 2025, in this photo released by Reuters. (Yonhap) Many observers warned that Trump’s tariff salvo could chip away at America’s reputation for reliability.
“Today’s tariff announcement will undoubtedly serve to further ‘liberate’ allies from their long-standing mindset of the U.S. as a reliable, trustworthy trading partner and the paramount protector of the prosperous world order it helped build,” Rob Rapson, a retired U.
S. diplomat who formerly served as charge d’affaires at the U.S.
Embassy in Seoul, told Yonhap News Agency. South Korean officials and businesspeople had already been steeling themselves for the potential ramifications of Trump’s tariff salvo as the Asian country’s conspicuously large trade surplus with the U.S.
, which reached US$55.7 billion last year, could put it in the president’s crosshairs. Still, the introduction of the reciprocal tariffs sounded alarm bells for many businesses seeking to create or strengthen footholds in the U.
S. market, particularly automotive firms. In addition to the duties, the Trump administration plans to start collecting 25 percent duties on imported cars and key auto parts Thursday while looking to impose new tariffs on other imports, including semiconductors and pharmaceuticals.
“In the short term, South Korea will try to work with the U.S. and try to adjust its trade surplus with the U.
S.,” Andrew Yeo, the SK-Korea Foundation chair at the Brookings Institution’s Center for East Asia Policy Studies, told Yonhap News Agency. President Donald Trump (Image courtesy of Yonhap) “But if Trump’s tariffs persist, causing longer-term economic pain among South Koreans, Seoul may look to diversify its economic relationship away from the U.
S., and the ROK-U.S.
alliance may experience more friction,” he added. ROK is short for South Korea’s official name, the Republic of Korea. Many observers predicted that reciprocal tariffs would mark only the beginning of Trump’s expanded trade fight.
“This Trump roller-coaster ride on tariff policy — and the dubious underlying economic theories driving it — seems destined to continue for the foreseeable future, notwithstanding the major economic dislocations, disruptions and hardships it causes for all parties,” Rapson said. After this week’s tariff announcement, South Korea could be driven into negotiations with the U.S.
, possibly over a new trade arrangement that might replace the existing FTA. Last week, Trump voiced his openness to making deals with countries after the announcement on reciprocal tariffs, if the U.S.
can “get something” through negotiations. The impact of additional U.S.
tariffs could be greater for countries whose economies have been closely tied to that of the U.S. In recent years, South Korea has deepened economic cooperation with the U.
S. as Washington has been diversifying global supply chains away from China and using subsidies and other incentives to draw in foreign firms under a “reshoring” campaign. “Trump appears to be aggressively taking advantage of the fact that for some countries, it is impossible to be economically independent from the U.
S. in any way,” said Kim Tae-hyung, the president of the Korean Association of International Studies and a political science professor at Seoul’s Soongsil University. Reciprocal tariffs have originated from Trump’s deep-seated perception that America has been “ripped off” by many countries, “both friend and foe alike,” as well as his desire to reshape the global trading system in favor of American interests.
“We’ve been ripped off by every country in the world, friend and foe. We’ve been ripped off on trade. We’ve been ripped off on military,” he said during a press availability March 21.
“We protect people, and they don’t do anything for us. It’s just so unfair for years and years. Now some of that money is going to be coming back to us in the form of tariffs,” he added.
Just two days before the reciprocal tariff rollout, the U.S. Trade Representative released an annual report on foreign trade barriers that listed South Korea’s “offset” defense trade policy, emission-related regulations on imported cars, pricing policies for pharmaceuticals and age-based restrictions on U.
S. beef imports, to name a few. For the first time, the report mentioned Korea’s defense offset trade program, under which Seoul has set certain conditions for foreign defense contractors to meet for defense industrial cooperation when they engage in key government procurement projects.
(Yonhap).
