U.S. Trade Representative Jamieson Greer, center, speaks during a press conference on the Supreme Court's ruling on Trump's tariffs as Commerce Secretary Howard Lutnick, left, watches, in the briefing room of the White House, Washington, D.C., Feb. 20. EPA-Yonhap
When the U.S. Supreme Court ruled Friday that President Donald Trump's so-called "reciprocal tariffs," based on his interpretation of the International Emergency Economic Powers Act, were unlawful, trading partner nations were caught in a dilemma.
But over the span of just a few days, the U.S. president continued to drop forceful comments, warning trading partners on Tuesday "not to play a game," leaving no doubt about the U.S. administration's intent toward tariffs. Korea, a major ally and trading partner, must grasp that the tariff landscape has become even more opaque. Determining the full breadth of the U.S.' intentions going forward — and its impact on Korea's major sectors — will be key to how the Korean export machine performs this year.
In the wake of the ruling, Trump immediately raised tariffs on global trading partners to 10 percent, and then to 15 percent the day after, invoking Section 122 of the Trade Act of 1974. For now, the 10 percent tariff has first taken effect. Treasury Secretary Scott Bessent said that the U.S. will be leveraging Section 232 and Section 301 tariff authorities that have been "validated through thousands of legal challenges," adding that he hopes that countries will honor their agreements with the United States. U.S. Trade Representative Jamieson Greer said that the U.S. was investigating potential unfair trade practices by China and Brazil.
These words are a clear signal from the U.S. administration that its aggressive trade policy, enacted through tariffs, will remain a key tool of the Trump administration.
For its part, the Korean government has wisely taken a circumspect stance by saying it will respect the bilateral trade deal that it clinched with the United States — a $350 billion investment package in exchange for a 15 percent blanket tariff. For Korea, the new tariff equals that 15 percent rate, which may seem like an easing of imminent concerns. But some experts have noted that the new tariffs may increase for some nations, including major U.S. allies.
As an Asian export powerhouse, especially for semiconductors, the Korean economy cannot rest easy. The nation's other top export items are steel, which has a 50 percent tariff, and automobiles, which are levied at 15 percent. Industry and government officials have all said that they will closely monitor the U.S. administration's next steps.
The most hopeful scenario would be the U.S. administration slowing its pace on — or reconsidering — its aggressive trade policy, since the tariffs imposed on imports from other nations have only increased prices for U.S. consumers without much visible contribution to the economy. Considering that the United States will hold midterm elections this November, it is unrealistic for Korea to work under that assumption. Instead, it should draft a set of countermeasures against what is being called Trump's "Plan B" in the wake of the Supreme Court's ruling. In particular, the U.S. Trade Representative's comment that the administration will open investigations under Section 301 of the Trade Act regarding unfair trade practices may be an ominous sign for trading partners. Newly strengthened sectoral tariffs are another tool possible under the authority delineated by U.S. laws.
Trading partners such as the EU and India have deferred trade talks and deals with the U.S. following the Supreme Court ruling. But as Korea and the United States' bilateral trade agreement has been reached and sealed, the government should wisely follow through out of respect for the agreement. It can also reference nations like Japan, where a similar trade deal has been reached. The most important thing is for the two signatories to uphold the existing agreement, which was reached in mutual trust and interest.
Source: Korea Times News
