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South Korea’s Trade Strategy Amid Trump’s Second Term: Diplomacy or Defeat?

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In a striking display of urgency, South Korea’s former Trade Negotiation Chiefs convened five days after Donald Trump’s re-election to strategize over the implications for South Korea’s export-reliant economy. The role of the Trade Negotiation Chief—critical for navigating economic diplomacy—has alternated between the Ministry of Trade, Industry, and Energy and the Ministry of Foreign Affairs, reflecting its strategic importance. This meeting underscored the uncertainty and potential challenges facing South Korea as it prepares to engage with a U.S. administration likely to prioritize domestic interests above all.

President-elect Donald Trump /AP·Yonhap News

The urgency of this meeting, convening South Korea’s leading economic diplomacy experts just days after the election, underscores the gravity of the situation. The Trump administration’s second term resembles an unpredictable, challenging force. At best, it represents a superpower fixated solely on its own interests. Its leader, a businessman by trade, appears willing to do anything that benefits him or his allies. His penchant for golf is well-known, and rumors suggest that the South Korean president has dusted off his golf clubs after eight years to cultivate a relationship with Trump.

The former Trade Negotiation Chiefs held a roundtable discussion to find ways to respond to this unpredictable administration. The theme was “The Inauguration of the New U.S. Administration: Is South Korea’s Economy Ready?” Watching the news, it seemed the only preparation in focus was golf. This isn’t unique to this administration, however; while the former chiefs’ comments at the roundtable were insightful, they felt somewhat hollow.

Their assessments of the current situation were similar, using diplomatic language to describe what they might call a challenging entity. They also generally agreed on the potential impacts on various industries and the differing policy directions compared to the Biden administration. The problem lies in the response plan. While the ideas make sense, how to implement them or whether the South Korean government can negotiate with this administration remains unclear.

Ten days before Trump’s victory was confirmed, iNews24 had already hosted a forum on “The Future of South Korea’s Economy and the U.S. Election.” At that time, with the race too close to call, the need for analysis was even more critical. The uncertainty of the outcome necessitated a broader range of scenarios. Despite the seemingly sound assessments by the experts, the proposed responses appeared vague and ineffective, possibly due to a lack of expertise in the field.

Reflecting on why only vague responses seem possible, two main factors come to mind. First, the Trump administration holds all the cards, while South Korea is vulnerable. This is especially true for export-oriented companies, which have much to say but feel constrained. When businesses are suffering silently, the government should step in to advocate for them. However, there’s a prevailing belief among South Korean companies that the government won’t effectively represent their interests.

Perhaps the strategy for trade diplomacy cannot be openly discussed. Yet, former Trade Negotiation Chiefs, as former officials, hold less responsibility for their statements and should be able to point out specific issues to address for the benefit of South Korean companies. “We must negotiate quickly with the Trump administration,” “A rapid public-private crisis response system is needed,” “Multi-layered alternatives must be prepared,” and “We must turn crisis into opportunity.” But can such general statements really address the real challenges South Korean companies face?

Calling Trump’s administration a challenging entity might seem excessive. However, since South Korea’s June Democratic Struggle of 1987, the citizens have enjoyed procedural democracy and considerable soft power. Trump’s second term will likely feel strange and outdated. Imagine Samsung’s Lee Jae-yong or SK’s Chey Tae Won publicly funding Trump’s campaign, attending his rallies, and cheering enthusiastically, as Elon Musk did for Trump in the U.S.

The prospect of Trump filling key government positions with family members – his children, son-in-law, and other relatives – is alarming. This is the same individual who, after losing the election, incited supporters to storm the Capitol. How does this differ from the leadership styles seen in North Korea, Russia, or China? The only significant distinction is that the United States wields more economic and military power than these nations.

If the South Korean president picked up a golf club for the first time in eight years to win Trump’s favor, then, optimistically, it could be seen as a diplomatic attempt to gain concessions. It might appear as submissive groveling before the powerful in a less favorable view. Either way, if there’s something to gain, South Korea cannot afford not to try. But it’s painful to consider if all we do is submit and end up with nothing but losses. Watching expert discussions is frustrating.

Former Trade Negotiation Chief Yoo Myung Hee, who also ran for WTO Director-General, assessed that “Trump’s second term would be the greatest challenge the WTO has faced in its 30-year history.” South Korea’s export-driven economy owes much to the WTO system. Though South Korea may have to tread carefully with the “challenging entity” for survival, South Korea should also focus on rejuvenating the WTO system for global prosperity. Pushing back against Trump through the WTO could open pathways for South Korea’s survival.

inews24
content@viewusglobal.com

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