The Donald Trump administration has begun negotiations with major trading countries that have imposed mutual tariffs due to a trade surplus with the U.S. and unfair trade practices. In particular, it is prioritizing negotiations with its allies, South Korea and Japan, which have significant trade surpluses.
On the 8th (local time), President Trump had his first phone call with Acting Prime Minister Han Duck-soo since taking office for his second term, discussing tariff issues among other topics. President Trump stated via social media that they discussed 'unsustainable trade surpluses with the U.S., cooperation in shipbuilding and LNG, the Alaska gas pipeline joint project, and defense cost-sharing issues.'
According to the Prime Minister's Office, both sides agreed to continue Minister-level consultations regarding economic cooperation plans, including trade balance. This essentially marks the beginning of trade negotiations between the two countries.
The South Korean government dispatched Jeong In-kyo, head of the Trade Negotiation Headquarters, to the U.S. to lower the mutual tariff and tariff rates on key items. It aims to secure conditions that are at least not worse than those of other trading countries in the negotiations with the U.S.
On the 2nd, the U.S. announced its mutual tariff rates by country, imposing a relatively high rate of 25% on South Korea, which has signed a free trade agreement (FTA).
U.S. Treasury Secretary Scott Bessenet noted in an interview with CNBC that 'about 70 countries have requested negotiations and are prioritizing negotiations,' and added, 'Our trading partners are lining up.'
The day before, President Trump declared that he would begin tariff negotiations with all countries except China, which has announced retaliatory tariffs. On the same day, he also discussed the negotiations with Japan's Prime Minister Shinzo Abe.
The White House explained that 'President Trump is prioritizing negotiations with allies South Korea and Japan.' Kevin Hassett, Chairperson of the White House Council of Economic Advisers, stated, 'President Trump is clearly prioritizing Japan and South Korea.'
While it outwardly appears to be an 'allied priority negotiation,' it is interpreted that the necessity to quickly reduce the U.S.'s massive trade deficit is reflected in the reality that negotiations must occur first with countries that have significant trade surpluses with the U.S., like South Korea and Japan.
Secretary Bessenet stated regarding Japan, 'We face a significant trade imbalance with Japan, and Japan also wants to resolve that imbalance.' Chairperson Hassett emphasized that 'the administration is laser-focused on major partner countries with significant trade deficits.'
The Trump administration is also continuing negotiations with other major trading countries like Mexico and Canada after imposing tariffs. The European Union (EU) is reviewing retaliatory tariffs, which could delay negotiations, while China's hardline response suggests that discussions may also slow down.
Some analysts suggest that the Trump administration may be strategizing to promote successes achieved with the easier negotiations with South Korea and Japan, sending a message to other countries that 'negotiation is better than retaliation.'
The Trump administration has not clearly stated its position on whether to reduce tariffs, but it does suggest that there is ample room for negotiation. Minister Bessenet mentioned, 'If there is a firm proposal, a good transaction can be possible.'
Jamison Greer, U.S. Trade Representative (USTR), also stated during a Senate hearing that 'if other countries provide better ideas for contributing to reciprocity and the resolution of trade deficits, we can negotiate.' However, he added that 'the President maintains a negative stance on short-term exemptions or exceptions.'
In this context, the South Korean government is trying to persuade the U.S. by proposing to expand imports and enhance cooperation in shipbuilding and the energy sector while preparing measures to reduce the trade surplus.
After the call with the acting authority, President Trump stated, 'The outlines of a great agreement for both countries are coming into view,' and Chairperson Hassett remarked, 'It was a positive dialogue for American workers and farmers,' adding, 'There were significant concessions.'
The South Korean government aims to respond cautiously while monitoring the negotiation trends with Japan and the EU, rather than hastily speeding up negotiations. This is because, depending on the outcomes, other countries may secure more favorable conditions.
There are also criticisms in the U.S. regarding the ambiguity of President Trump's tariff policy. It suggests that the goal of securing revenue through tariffs may clash with the objective of reviving manufacturing jobs.
Minister Bessenet explained that 'the ultimate purpose of tariffs is to bring jobs back to America, but until then, tariff revenue is important,' adding, 'If we succeed, tariffs will gradually decrease like melting ice, while income tax will increase.'