Seoul: Facing US President Donald Trump’s imminent sweeping tariff scheme and mounting pressure on a range of industries and the economy, South Korea needs to boost its imports of American energy and highlight room for cooperation in areas crucial to the US as leverage in possible negotiations, experts said Thursday.
South Korea has been scrambling to seek tariff exemptions amid concerns about the impact of Trump’s new tariffs on its trade-resilient economy, as the U.S. plans to impose 25 percent tariffs on all steel and aluminum imports starting Wednesday.
Washington has moved to introduce “reciprocal” tariffs next month to match duties that other countries impose on U.S. exports. It is also planning to roll out tariffs on cars, semiconductors and pharmaceuticals- major export items for South Korea, reports Yonhap news agency.
In his address to a joint session of Congress Tuesday, Trump argued that South Korea’s average tariff is four times higher than that of the U.S., despite the U.S. providing “so much help militarily and in so many other ways to South Korea.”
“We should not overreact to Trump’s remarks, as it was more of a message for internal audiences, rather than a demand for us (South Korea),” said Cho Seong-dae, a senior researcher at the Korea International Trade Association (KITA).
The Seoul government has refuted the claim, stating that the average tariff rate on American imports stood at 0.79 percent as of last year under the bilateral free trade agreement (FTA) between Seoul and Washington.
“But we need to respond thoroughly to any specific demand. Now is the time for the government and industries to prepare their negotiation cards,” Cho added.
Given the Trump administration’s discontent with the U.S.’ trade deficit with South Korea, the Seoul government is advised to take steps to address the short-term trade imbalance, according to experts.
“We can also buy more energy, semiconductor equipment, aircraft and military items from the U.S. We need to emphasize that the Seoul government is working hard to address these trade surplus issues,” said Jang Sang-sik, a KITA official.
South Korea’s trade surplus with the U.S. reached a record high of $55.69 billion in 2024, marking the largest surplus among America’s major trading partners for the second consecutive year.
Regarding the CHIPS and Science Act, experts called for efforts to ensure that South Korean companies follow through on investment pledges, which would help reduce the U.S. trade deficit and create more jobs.
Samsung Electronics, SK hynix Inc. and other companies here have expanded investments in the U.S. and are set to receive grants. However, Trump has called for repealing the CHIPS and Science Act, calling it “horrible.”
“The U.S. trade deficit is expected to decrease once South Korean companies begin operating manufacturing facilities they are building in the U.S. and increase production there. We need to emphasize that stable business environments are crucial for continued corporate investments in the U.S.,” said Han Ah-reum, a KITA researcher.
“We should actively push for ways to strengthen bilateral cooperation in sectors where the U.S. has long-term interests, such as the shipbuilding industry. This can serve as a valuable negotiating tool and help ease trade pressure,” said Kim Tae-hwang, a professor at Seoul’s Myongji University.
IANS