U.S. experts predict that if Donald Trump retakes the White House and enforces a strong tariff policy, South Korea, which revised the Free Trade Agreement (FTA) during the Trump administration, may not be an exception.
Eric Altbach, a partner at the consulting firm Albright Stonebridge Group, said at a U.S. presidential election outlook seminar hosted by KOTRA in Washington DC on the 22nd (local time), “Trump will continue to focus on countries that have a large surplus in bilateral trade with the U.S.”
Altbach, a former Deputy Assistant U.S. Trade Representative (USTR) for China Affairs, responded to a question about the possibility of renegotiating the Korea-U.S. FTA if Trump returns to power: “It’s a bit awkward for him to say let’s renegotiate it again, as he’s touting the renegotiation of the Korea-U.S. FTA as a victory. That can provide a bit of stability.”
However, he predicted, “I don’t think Trump will think he can’t take other trade measures against South Korea because of the FTA. Trump is creative. The fact that there is an existing agreement between South Korea and the U.S. won’t necessarily stop Trump from exercising that creativity.”
In this regard, Trump pledged to impose a universal 10% tariff on all imported goods, prioritizing the elimination of the trade deficit if he returns to power. Last year, South Korea’s trade surplus with the U.S. reached a record high of about $44.4 billion.
John Russell, a partner in charge of the U.S. law firm Dentons, said, “Look at TikTok. When Trump was president, he tried to ban it, but now, as a presidential candidate, the House of Representatives is trying to stop the same thing,” indicating that past standards cannot judge Trump. Tami Overby, a former senior vice president of the U.S. Chamber of Commerce for Asia and a senior advisor at the Albright Stonebridge Group, said, “No country should think it is safe.”
Sander Lurie, a partner in Dentons’ government relations practice, predicted that if Trump is re-elected and the Republican party becomes the majority party in both the House and Senate, they could scrap the Inflation Reduction Act (IRA). The IRA is one of the most significant legislative achievements of the Joe Biden administration, pouring substantial subsidies into the transition to eco-friendly energy, including electric vehicles. Still, Trump has declared that he would completely roll back such eco-friendly policies from his first day in office. However, Lurie said it would not be easy to scrap the so-called Chip Act, a semiconductor law, and the infrastructure law, as there was considerable support from the Republican party at the time of legislation.
Experts also pointed out that if Trump is elected, there could be unpredictable situations related to defense cost negotiations. Partner Altbach mentioned Trump’s comment to NATO, “If you don’t pay more for defense, we won’t help,” and said, “While Trump is more focused on NATO, we cannot rule out the possibility of having such a conversation with Korea.” He added, “There’s no reason to believe that Trump won’t renegotiate, ignoring the previous administration’s agreement.”
Most Commented