November 15, 2024

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Cho Seong-dae (second from left), director of trade studies and cooperation at KITA, speaks during the second session of the Korea Herald Security Forum 2024, held at the National Assembly Museum in Seoul, Wednesday. (Lee Sang-sub/ The Korea Herald)

Trade specialists agreed that Donald Trump’s second term could be both a boon and bane for Korean businesses as they discussed the outlook for policy changes under the upcoming US president during The Korea Herald Security Forum held in Seoul on Wednesday.

Over 200 foreign affairs and trade specialists, lawmakers and ambassadors joined the inaugural event, titled “Alliance after US Election 2024: A Seoul Perspective.” The second economic and technological security session was moderated by Hanwha Asset Management’s Chief Strategy Officer Choi Young-jin.

"From the perspective of trade policies, both the Trump and Biden administrations have pursued protectionist measures in the past," said Lee Hyo-young, associate professor at the Korea National Diplomatic Academy’s Institute of Foreign Affairs and National Security.

She opened the dialogue by suggesting that Trump's strong interest in cooperation with the Korean industry might open new avenues, saying “In a phone call with President Yoon Seok Yeol after the election, Trump reportedly mentioned collaborating with Korea’s shipbuilding industry and showed steady interest in semiconductor technology, which implies he sees Korean companies as strong, valued partners.”

James Kim, chair and CEO of the American Chamber of Commerce in Korea, explained how Korean investments in the US might align with Trump's business-focused approach.

"The public often seem to use the term 'America First' with a somewhat negative connotation. But frankly, I believe every president should prioritize their country," Kim said.

"With Trump’s business-minded approach, he’ll likely want to help US companies succeed, including in Korea. Major companies like Samsung, LG and Hyundai have invested some $140 billion in the US over the past three years. With such level of commitment, I believe we can work effectively with Trump to support both of our success."

Meanwhile, the panelists acknowledged concerns about potential tariff hikes, considering Trump has hinted his will to impose a universal tariff hike of 10-20 percent on all imports to the US and up to 60 percent of goods brought in from China.

"The Chinese tariff increase seems highly likely, and if it happens, Chinese companies might try to relocate to Korea to continue doing business with the US (for a more favorable tariff)," said Baek Seo-in, assistant professor of Chinese studies at Hanyang University.

"We must closely monitor the potential decoupling between the US and Europe, not just between the US and China, to see the full picture.”

Cho Seong-dae, director of trade studies and cooperation at the Korea International Trade Association, said that while these tariffs pose risks, Korean businesses may have some advantages.

"Trump has called himself the 'tariff man,' signaling an even more protectionist trade policy. However, there’s a potential advantage. If the US imposes high tariffs on Chinese imports, like the EU did with Chinese EVs, Korean products may gain a pricing edge in the US market,” Cho said.

Meanwhile, in regards to the Korea-US free trade agreement, the panelists noted that concerns about amendments or renegotiation were largely speculative.

"The anxiety over amending the Korea-US FTA is mostly unfounded at this point," Lee, the foreign affairs professor, said, cautioning against unnecessary public worry.

Kim, the AmCham CEO, also supported this view, emphasizing that the FTA functions as "a framework for resolving issues that arise," rather than a rigid set of rules.

The discussion closed down to the broader implications of US trade policies on global supply chains and domestic manufacturing.

"The aim of tariffs is not just to counter China but to rebuild American manufacturing and employment," Cho, the KITA director, said. "At the end of the day, US trade policies are as much about strengthening domestic industries as they are about curbing China’s influence."

By Kim Hae-yeon (hykim@heraldcorp.com)