How South Korea forged US tariff deal
Patrick Cronin, Asia-Pacific Security Chair at the Hudson Institute, praised the outcome of the negotiations between the two nations.
"I think it's excellent that South Korea was able to reach an agreement under these very difficult circumstances in a period of eight weeks after this new administration has taken office." Patrick Cronin, Asia-Pacific Security Chair, Hudson Institute
Due to domestic political instability, South Korea was late in initiating the tariff negotiations. Cronin pointed out that the country benefited from a "second-mover advantage," having observed Japan's earlier deal. He noted that Seoul's deal closely mirrors Tokyo's, especially in key areas like automobile tariffs.
"The South Korean government wanted to at least achieve the same results, say on autos, auto tariffs that the EU and Japan, had so that they didn't feel disadvantaged. I think the biggest sticking point at the end was the amount of the investment." 'Make America Shipbuilding Great Again'
In a strategic move just ahead of the deadline, Seoul proposed a 150 billion-dollar shipbuilding initiative called "Make America Shipbuilding Great Again," a play on words of US President Donald Trump's campaign slogan.
The shipbuilding outlay is in addition to 200 billion-dollars of Korean investment into the US for "investment, loan, and loan guarantees in strategic industries related to economic security such as semiconductors, nuclear power, batteries, bio, and core minerals," according to a government press release. South Korea brought custom-made 'MASGA' hats to Washington for negotiations.
The heads of some of the country's largest global companies, including Hyundai Motor Group and Samsung Electronics, reportedly converged on Washington, D.C. to show support for their government's negotiators.
South Korean officials emphasized the relatively modest size of the total package. Kim Yong-beom, South Korean presidential chief of staff
"Our investment commitment ended up being smaller than Japan's," said Kim Yong-beom, South Korean presidential chief of staff for policy. "Excluding shipbuilding, the 200 billion-dollar investment amounts to just 36 percent of Japan's."
Patrick Cronin
"There is domestic concern inside South Korea, as you may know, that the full amount of potential investment that South Korea is talking about exceeds their current reserve. So they want to downplay the total number, and I understand that for political reasons."
President Lee Jae-myung and Trump are expected to hold a summit this month. Cronin predicted the meeting may be more than just ceremonial.
"I would expect there to be opportunity for some initial proving on both alliance issues – for instance, about the forthcoming defense review that could bring force structure changes. But also…on aligning North Korea policy on thinking about outreach to Kim Jong Un."
Cronin said he does not expect concrete outcomes on tougher issues, but he sees the summit as a starting point for deeper dialogue. US, South Korea joint military drills Broader strategic concern
Cronin said the US deals with South Korea and Japan may serve as a foundation for deeper cooperation. But with rising competition and shifting alliances, the road ahead remains complex.
He also noted that while US ties with key allies like Japan and South Korea remain strong, nations in Southeast Asia are increasingly turning toward Beijing as a hedging strategy.
"The Asian allies, especially in Southeast Asia, are famous for seeking hedging strategies that make sense…Middle powers have to fend for their autonomy and interests as major powers compete, and that's understandable. I think the United States is losing some opportunity with these upheavals that we are helping to create. We're giving China kind of an easy pass on some of its behavior. It now looks like it's the more predictable, stable, stabilizing force. And I don't think that's accurate."
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