The United States and China announced on the 12th that they have agreed to reduce the tariffs that have been raised since Feb. for 90 days. The U.S. will reduce the additional tariffs imposed on China from 145% to 30%, and China will lower the retaliatory tariffs on the U.S. from 125% to 10%. This agreement, derived from high-level negotiations between the U.S. and China held in Geneva, Switzerland, is also referred to as the 'Geneva tariff agreement'.
Governments, corporations, and investors around the world are paying attention to what kind of negotiation plan the U.S. and China will create following the Geneva tariff agreement and the subsequent impact on the global economy. In response to ongoing intergovernmental trade frictions since the inauguration of the Donald Trump administration, Law firm BKL (Bae, Kim & Lee) has recently launched the 'Trade Strategy Innovation Hub' to consult on domestic corporations' response strategies.
The Trade Strategy & Innovation Hub is headed by executive consultant Choi Byeong-il. Choi participated as Korea's representative in the Uruguay Round service negotiations in the 1990s and also served as the negotiation representative for the World Trade Organization (WTO) basic telecommunications negotiations. Additionally, in Feb., Choi visited the United States as a member of KORCHAM’s 'outreach delegation' to discuss cooperation measures between South Korea and the United States.
Choi noted that the Geneva tariff agreement is a kind of exit strategy for the U.S. and China to find a negotiation space amid growing concerns over economic crises. Choi added that they would demand that China fulfills its extensive purchase commitments of American products promised during the first administration, seeks a fundamental resolution to the fentanyl issue, and addresses the unfair trade problems caused by China's economic system.
Choi added, "However, because the U.S.'s demands require China to alter its policy trajectory significantly, it's more likely they will reach a small deal rather than a big deal." Choi continued, "Given that Korea's manufacturing sector is falling behind in competition with China, it should consider the U.S. a partner in resolving the issue and present ideas to enlarge the playing field and take concrete steps in that direction."
In the future, the Trade Strategy & Innovation Hub plans to conduct research on trade, global tariff policy, trade disputes, and regulations. The hub includes advisors like Lim Sung-nam, a former Vice Minister of the Ministry of Foreign Affairs and ambassador to the UK and ASEAN, Huh Kyung-wook, a former Vice Minister of the Ministry of Economy and Finance and senior economist at the International Monetary Fund (IMF), Shin Jae-yoon, a former Chairperson of the Financial Services Commission and the Financial Action Task Force (FATF), and Pyo In-soo, who has experience in the Ministry of Trade and Industry and the Blue House.
The hub also includes Woo Byung-ryul, an attorney-at-law in New York who served as the director-general of the long-term strategy department and the international economic bureau at the Ministry of Economy and Finance, Kim Young-mo and Jung Kyu-sang, foreign attorneys-at-law in New York who have served as chief negotiators for the Korea-U.S. FTA and the Korea-EU FTA services negotiations, Kim Hak-kyun, a foreign attorney-at-law in New York and Washington with US legal experience who served as a standing commissioner of the Financial Services Commission, and Sung Kim, a former U.S. diplomatic official.
Other members of the hub include Joo Sung-joon, an expert in the Tariff Act, FTA, and Foreign Exchange Transactions Act, Kim Ji-na, a lawyer who served as a trade advisor at the Ministry of Foreign Affairs, Jang Seong-doo and Park Jae-young in international taxation and tariff & trade areas, Kim So-dam, a commercial arbitration expert, Kim Jun-woo and Kim Woo-jae attorneys, Han Chang-wan from the Ministry of Justice's international dispute response department, and Kang Il and Kim Gyu-sik from the semiconductor industry response team and others experienced with Ministry of Trade, Industry and Energy.
The Trade Strategy & Innovation Hub will also provide integrated consulting with the Pacific International Tariff & Trade Group. The International Tariff & Trade Group previously achieved favorable outcomes by handling the investigation related to Article 232 of the U.S. Trade Expansion Act during the first administration of Trump. While the Trump administration imposed a 25% tariff on foreign steel based on this law, Korea secured a tariff-free quota.
Recently, Pacific has seen a significant influx of experts in international taxes and tariffs. Chris Mainwaring-Taylor, a foreign attorney (UK) and international arbitration expert from Allen & Overy (A&O), a top five UK law firm, and Jeremy Everett, a foreign accountant (Washington), a 30-year veteran in international taxation, have joined. Additionally, Lee Chan-ki, a former president of the Korea Trade Development Institute and Vice Administrator of the Korean Customs Service, has been recruited.
Lee Jung-ki, the representative attorney at BKL, noted, "The launch of the Trade Strategy Innovation Hub is aimed at maximizing synergy by bringing together the wisdom, experience, and capabilities of BKL experts amid an increasingly uncertain trade environment." Lee emphasized, "To help corporations overcome the crises they face, the hub's members, with their vast experience and expertise, will deliver optimal solutions through comprehensive efforts."