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Yahoo
11-04-2025
- Business
- Yahoo
White House says it's working on new trade deals, but it's hiding the countries' names
In Donald Trump's first term, the president and his team successfully completed two trade deals. The first was a deal with South Korea, which tweaked the existing KORUS agreement, and the second was the USMCA agreement with Canada and Mexico, which tweaked the existing NAFTA agreement. In both instances, however, the process was quite public: Trump wanted everyone to know what he was doing and with whom. There were private negotiations, of course, but no one saw a need to keep the existence of the talks under wraps. On the contrary, the White House was eager to alert the public to the fact that the talks were happening. In the Republican's second term, things are ... different. The New York Times summarized matters this way: A day after President Trump capitulated on his global reciprocal tariffs, he and Commerce Secretary Howard Lutnick insisted that one country after another was coming to them to make deals to avoid further economic pain. But the devil is in the details, and Mr. Trump and Mr. Lutnick offered very few. Instead, they said that things would work out, without saying much more. As this week got underway, and much of the planet focused on the White House's trade tariffs, the president published an item to his social media platform that said 'more than 50' countries had contacted the administration about negotiating new trade deals. A few hours later, Trump revised the total, touting that it was 'almost 70' countries that had reached out. On Wednesday, when the Republican announced a 90-day 'pause' for much of his tariffs agenda, he wrote that his decision was driven by the fact that 'more than 75' countries that wanted to open negotiations with the administration. The White House press office soon after said it would not disclose the names of the 75 countries. It also wouldn't say why the list had to be kept secret. Kevin Hassett, the director of the White House National Economic Council, tried to clarify matters a day later, telling CNBC that the total number of countries is more than 75, but only about 15 of them had presented the administration with 'explicit offers.' Hassett, a Trump trade adviser, made similar comments on Fox News. But asked to list the trade partners, Hassett stuck to a familiar line. 'I'm not going to name the countries yet,' he said. It's possible that the White House has legitimate diplomatic reasons to keep the details secret. But it's also difficult to give Trump and his team the benefit of the doubt. This is, after all, a president who has repeatedly referenced conversations that did not occur in reality. Complicating matters further, with a 90-day pause in place, it's far from clear how the White House intends to strike multiple bilateral deals simultaneously over the course of a few months. Given all of this, and Team Trump's odd refusal to offer relevant details, the administration's assurances should probably be taken with several grains of salt. This article was originally published on
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![[Herald Interview] Trump unlikely to revisit FTA, but tariffs may hit Korea harder: strategist](/_next/image?url=https%3A%2F%2Fall-logos-bucket.s3.amazonaws.com%2Fkoreaherald.com.png&w=48&q=75){kind=small}
Korea Herald
27-03-2025
- Business
- Korea Herald
[Herald Interview] Trump unlikely to revisit FTA, but tariffs may hit Korea harder: strategist
Ex-US diplomat outlines strategic dos and don'ts for Seoul in navigating Trump 2.0 US President Donald Trump's tariffs on specific industry sectors will be more consequential for South Korea than his looming "reciprocal" levies, with core industries like automobiles, semiconductors and steel — pillars of the country's export-driven economy — squarely in the crosshairs, former US veteran diplomat Kurt Tong told The Korea Herald in Seoul. Tong, managing partner at The Asia Group, a Washington-based strategic advisory firm, urged Seoul to adopt a calibrated response — whether through retaliation, selective acceptance, or constructive incentives such as investment pledges — depending on the extent and justification of tariffs, imposed outside the protections afforded by the Korea-US Free Trade Agreement. Tong, however, saw only a slim chance of the Trump administration pursuing a renegotiation of the KORUS due to political and procedural burdens, particularly with a sharply divided US Congress, despite growing concerns in Seoul. Trump's trade blitz, with its two main axes of sectoral and reciprocal tariffs, has put South Korea on alert. The country is scrambling to stay off a looming list of reciprocal tariffs, which are designed to mirror duties and barriers faced by US exports. The list is set to be unveiled on April 2 — a date Trump has labeled as 'Liberation Day." "I actually think that for Korea, the sectoral tariffs are going to be more important than the reciprocal tariffs," Tong told The Korea Herald on March 21. "Among the nations of the world, Korea has — if you think about the sectoral tariffs that have been proposed on automobiles, steel and aluminum, semiconductors, and pharmaceuticals — Korea is a major exporter of three of those four items." The US accounted for 50.8 percent of Korea's $68.3 billion of auto exports, up from 47.1 percent a year earlier. Semiconductor exports contributed $141.9 billion to overall exports, with the US portion remaining at around 7.2 percent. The US also took in 21 percent of Korea's steel exports, or around $4.7 billion, and was the fourth-largest destination, according to the Korea International Trade Association. Ahead of the rollout of a range of reciprocal tariffs, Trump on Wednesday announced a plan to levy a 25 percent tariff on all imported automobiles — yet another key axis in his wide-ranging tariff push centered on sector-specific measures. The move follows through on his February pledge to tax big industries, including autos, semiconductors and pharmaceuticals, "in the neighborhood of 25 percent." A 25 percent tariff on steel and aluminum is set to take effect on March 12. 'The tariff rates that are being discussed are very high, significantly high rates," Tong underscored. Tong said South Korea must formulate its strategy based on how sectoral and reciprocal tariffs are calculated — and whether the tariff figures proposed by the US are reasonable or excessive. "So, Korea also needs to have a strategy for those tariffs, whether it involves retaliation, whether it involves acceptance, whether it involves positive leverage response," Tong said. "By positive leverage response, for example, the Korean government, Korean industry could work together to make promises about more investment in the United States." Hyundai Motor Group on Monday announced a plan for $21 billion in new investments in the US through 2028 — marking its largest overseas investment — at the White House, drawing Trump's praise. FTA expected to stay intact However, Tong saw little chance of the Trump administration seeking to amend the KORUS FTA, despite rising concerns in Seoul. The agreement already went through changes in Trump's first term to incorporate US demands, including limiting Korean steel exports, relaxing US auto import requirements, and a 20-year extension of US tariffs on Korean trucks, as well as Korean demands. 'I actually would be surprised if the Trump administration decides to put more energy into an FTA revision or a new FTA, because they're skeptical about FTAs and the president, politically, wants fast and big victories,' Tong said. 'The FTA approach takes a long time — it's very complicated. The public doesn't understand what's happening. The president then would have to — if it's a real FTA — get cooperation from Congress, which is complicated and difficult.' With Republicans maintaining their slim 53–47 Senate majority and only a five-seat House edge — one of the thinnest margins in modern history — deep partisan fault lines have brought Congress to a standstill, making complex trade negotiations politically fraught and unlikely to move. 'The US Congress is very skeptical on trade — but it's mostly skeptical about passing anything, any legislation, because of the sharp political divide between Republicans and Democrats,' Tong said. 'So I think it's going to be more of a sector-by-sector type negotiation than an FTA negotiation.' 'Dos and don'ts' for Seoul When asked what South Korea can do to successfully navigate challenges during the second Trump administration, Tong discussed "the dos and don'ts of the relationship," proposing a list of strategies for Seoul. 'On the 'do' side, it's about dealing with the reality of the Trump administration. The good things to do are to be positive in setting the agenda, play to your strengths, emphasize those strengths, be direct and clear in communication — without being excessively confrontational — and seek to communicate directly with President Trump," Tong said. 'The don'ts are to assume that Trump and his team understand everything, to reference prior agreements as if those can't be changed, or to be quiet or passive and ask for forgiveness or to be spared.' Instead of approaching negotiations defensively, Tong said, Korea should present itself as a partner with leverage: 'Going into the Trump conversation with 'Please don't hit me, I'm scared' means you're going to get hit harder. Go in with: 'You shouldn't hit me because you want something from me. Here are some possibilities, let's talk about it — person-to-person, man-to-man negotiation style.'' Tong characterized the two sides' discussion as "more like a bottom-up, zero-based conversation," though he noted a hopeful prospect was in sight. "I think the end result will be the relationship being fine and solid — because it's to the mutual benefit of the United States and Korea to have a strong relationship, to have a deep economic relationship — but that it has to be kind of explained from the beginning, not in a university lecturer kind of style, but rather in a negotiating style," Tong said. "Trump's going to bring a lot of leverage to the relationship. Korea can also bring leverage — both positive leverage and negative leverage — to the conversation, and then frame it in a way that is like a negotiation, but also touches on the fundamentals." Will Trump attend APEC? The Asia-Pacific Economic Cooperation summit, which South Korea is set to host from late October to early November this year, will serve as one of the key platforms where Trump can foster economic and business ties with Korea, and meet with leaders in the Indo-Pacific region, including Chinese leader Xi Jinping. "I don't expect the US to use APEC for any big policy moves. But still, APEC could be useful to the US. The US could be interested in it for specific topics, like if there's a good discussion on AI and AI rules at APEC, the US will participate,' Tong said. 'I don't think President Trump is personally interested in that. He's more of a big-picture approach.' Tong said his "best guess" would be that Trump will attend for mainly two reasons despite his bilateral and transactional style of trade, which is contrary to the core mission of APEC for free and open trade in the Indo-Pacific region. 'One is because Korea is an important country, and it could be part of his strategy for negotiating with Korea to build a stronger economic relationship that fits more with the America First approach — and that's attractive to the president,' Tong said. 'And the other is, it's a venue for conducting the China negotiations — because China is an active member in APEC, and President Xi is almost certainly going to come because China is hosting APEC in 2026.' Tong further explained that Trump's participation in APEC could be influenced by Russian President Vladimir Putin's potential participation, which is currently prohibited, and by North Korea's actions, which aim to raise the country's priority in US foreign policy. 'If Trump's strategy for a ceasefire and armistice in Ukraine is successful — I don't know whether it will be, as I think it's proving more difficult than he expected — but if it is successful, then maybe he could meet Vladimir Putin at APEC as well,' Tong said. 'So, there's also a North Korea policy angle to visiting South Korea. I don't think that's a high priority for the United States, but North Korea might try and make it a priority by misbehaving sometime this year. We'll see what their strategy is, whether they want to poke their head up and start messing around again or not. So, I expect he'll come, and a lot of these themes will be happening.' On North Korea, Tong made clear that renewed summit diplomacy is unlikely under a second Trump administration — unless Pyongyang takes the initiative. 'Right now I see no signs of the US proactively reaching out to North Korea and making them a high priority,' he said, adding that Trump's door to communication remains technically open — 'he might send them a letter.' Tong emphasized that Trump's past efforts to strike a "grand bargain" with North Korean leader Kim Jong-un failed because Kim was unwilling to fully abandon his nuclear program in return for a promising future, including economic growth and diplomatic recognition, and given Kim's continued stance, Trump is unlikely to pursue negotiations again. "He (Trump) is not going to put a lot of energy into it. I think if there's going to be a Trump-Kim dance, Kim's going to have to make the first move,' Tong said. "It does take two to dance, but somebody's got to ask the other one out, and I don't think it's going to be Trump."
Korea Herald
21-03-2025
- Business
- Korea Herald
US industry group calls on USTR to urge S. Korea retract online platform regulation proposals
An American industry group has asked the United States Trade Representative to urge South Korea to withdraw its digital platform regulatory proposals, stressing they pose an "unnecessary irritant" to the two countries' relationship and could breach a bilateral free trade agreement. The Coalition of Services Industries submitted the comments to the USTR last week to assist in the review and identification of "unfair trade practices and harm from non-reciprocal trade arrangements." The USTR is likely to examine the case for its calculation of "reciprocal" tariffs for Korea set to be rolled out on April 2. In late 2023, the Korea Fair Trade Commission proposed enacting an act aimed at tightening oversight over market-dominant online platform businesses to ensure fair competition. After pushback from US stakeholders and others, it announced a new proposal in September to revise the country's existing key anti-trust law instead of seeking new legislation. "Concerningly, the new proposal still retains problematic elements from the ex-ante proposal, such as disproportionately targeting US companies and narrowly focusing on online services that US firms provide in Korea," the coalition said. It pointed out that other bills for digital platform regulation are also under consideration at South Korea's National Assembly. "Korea's pursuit of discriminatory legislation against US firms is an unnecessary irritant to the longstanding bilateral relationship and a potential KORUS violation that creates an unlevel playing field for US firms competing against rapidly growing Chinese e-commerce companies," it said. KORUS is short for the South Korea-US free trade agreement. "CSI asks USTR to urge the Korean government to withdraw both ex-ante and ex-post proposals that would significantly disadvantage US firms," it said. During a confirmation hearing in February, then USTR nominee Jamieson Greer warned South Korea and other countries against taking regulatory measures that would negatively affect American online technology firms, saying that "it won't be tolerated." The coalition lashed out at the KFTC, accusing it of unfairly treating US firms. "The KFTC continues to unfairly target US companies with unprecedented fines, office raids, threats of prosecution, and attempts to harass American companies with criminal allegations and erroneous investigations," it said. "This enforcement culture in Korea is a troubling anomaly for a closely allied US trading partner and could represent 'unfair or harmful acts, policies, or practices' that present a 'structural impediment to fair competition' per the Trump administration's recent Reciprocal Trade Memo." It was referring to the presidential memorandum that President Donald Trump signed last month to devise a comprehensive plan to customize "reciprocal" tariffs based on trading partners' duties, non-tariff barriers, exchange rate policies and other elements. The coalition also took issue with South Korea's telecommunications business act, which it depicted as a legal basis for allowing Korean telecommunications providers to charge online platforms for utilizing the online network. It particularly pointed to provisions, such as a regulatory requirement to designate a domestic representative, which it said "not only add unnecessary friction to trade, but also have potential implications for taxation and are inconsistent with Korea's obligations under the Korea-US FTA." It went on to underscore additional regulatory proposals in South Korea that require content and application providers to enter into a network use agreement with Korean internet service providers, or additionally mandate CAPs to pay "network usage fees" to Korean ISPs under the agreement. "Failure to comply would result in the issuance of a correction order or a penalty surcharge," it said. "These proposals would restrict the ability of US content and applications service providers to access the Korean telecommunications network on reasonable and nondiscriminatory terms and conditions, calling into question Korea's adherence to its KORUS commitments." Moreover, the coalition highlighted South Korea's restrictions on the export of location-based data, which it claimed have led to a competitive disadvantage for international suppliers seeking to incorporate such data into services offered from outside of Korea. "Foreign-based suppliers of interactive services incorporating location-based functions, such as traffic updates and navigation directions, cannot fully compete against their Korean rivals because locally based competitors typically are not dependent on foreign data processing centers and do not need to export location-based data," it said. "Korea is the only significant market in the world that maintains such restrictions on the export of location-based data." It noted that exporting geospatial data requires a license in Korea, arguing that Seoul has never approved a license to export cartographic or other location-based data, despite numerous applications by foreign suppliers. "US stakeholders have reported that Korean officials, citing security concerns, are linking such approval to a separate issue: a requirement to blur certain integrated satellite imagery of Korea, which is readily viewable on other global mapping sites based outside of Korea," it said. "Korean officials have expressed an interest in limiting the global availability of high-resolution commercial satellite imagery of Korea but have no ready means of enforcing such a policy since most imagery is produced and distributed from outside of Korea." The comments came as the Trump administration plans to impose country-by-country reciprocal tariffs that will be customized based on US trading partners' tariff- and non-tariff barriers, and other factors, such as exchange rates and unfair trade practices. (Yonhap)
Korea Herald
21-03-2025
- Business
- Korea Herald
US industry group asks USTR to help reduce or eliminate S. Korea's 'screen quota' system
A US industry group has called for South Korea to lower or remove the Asian country's "screen quota" system that mandates theaters fill part of their screening time with domestic firms, in comments made to the United States Trade Representative. The Coalition of Services Industries submitted the comments to the USTR last week to assist in the review and identification of "unfair trade practices and harm from non-reciprocal trade arrangements." The USTR is likely to examine the case for its calculation of "reciprocal" tariffs for Korea, set to be rolled out April 2. "In 2006, prior to the KORUS FTA negotiations, the Korean government agreed to reduce its screen quota requiring exhibition of Korean films to 73 days per year," the coalition said in the comments viewed by Yonhap News Agency. KORUS FTA is short for the South Korea-US free trade agreement. "Over 16 years later, amidst rapid development of its cultural industries and the success of many Korean films and television productions internationally, now is the time for Korea to show leadership in the region, trust the choices of its consumers and further reduce or eliminate its screen quota," it added. South Korea's screen quota system was initiated decades ago to protect local films from big-budget Hollywood flicks. The 73-day quota was fixed in 2006, down from the previous 146 days. The coalition also took issue with Korea's small de minimis duty exemption for imports from the US. "Korea only applies the $200 de minimis mentioned above to imports from the US and has not implemented it globally on a most-favored nation basis. This has undermined the main benefit of a higher de minimis level, namely a streamlined process for rapid border clearance of these goods," it said. "Conversely, Korea's interpretation has added to the complicated web of regulatory restrictions that inhibit trade facilitation while requiring the dedication of more automated resources to distinguish shipment values for separate customs procedures according to origin." The comments came as US President Donald Trump's administration plans to impose country-by-country reciprocal tariffs that will be customized based on US trading partners' tariff and non-tariff barriers, and other factors, such as exchange rates and unfair trade practices. (Yonhap)
Korea Herald
10-03-2025
- Business
- Korea Herald
Fact-checking Trump's tariff claim about South Korea. What are his real motives?
Trump's tariff claim seen as strategy to pressure Korea on trade and security US President Donald Trump's March 4 claim that South Korea levies tariffs four times higher than those of the US has sparked controversy about its accuracy as well as concerns about the possible intent behind the statement. 'China's average tariff on our products is twice what we charge them, and South Korea's average tariff is four times higher,' Trump said in a speech at a joint session of Congress last week. 'Think of that, four times higher, and we give so much help militarily and in so many other ways to South Korea, but that's what happens. This is happening by friend or foe.' Trump singling Korea out has stoked concerns among policymakers and businesses here, fearing that Asia's fourth-largest economy could be next in line for "reciprocal tariffs" by the US leader. Trump might attempt to justify such a move by claiming that South Korea puts significantly higher duties on American imports. Here, The Korea Herald checks the facts behind Trump's claims and sheds light on his possible motives behind them. Trump did not provide any details on where he got his tariff figures. However, observers say his words could be erroneously based on the most-favored-nation tariffs ― the standard tariff rates countries impose on imports from other members of the World Trade Organization unless there is a preferential tariff arrangement like an FTA. Seoul's MFN tariff rate stands at 13.4 percent, approximately four times higher than the US rate of 3.3 percent. But this doesn't apply with the US, which has a free trade deal with Korea since 2012 and is subject to preferential tariffs. 'Under the Korea-US Free Trade Agreement, both Korea and the US have eliminated tariffs on most goods. As of 2004, Korea's effective tariff rate for goods imported from the US is approximately 0.79 percent,' the Industry Ministry clarified immediately after Trump's remarks. The rate drops further when considering refunds, it added. Some imported goods qualify for additional duty refunds. The tariff rate for US imports is expected to decrease even more this year under a scheduled reduction plan, according to the ministry. The US Trade Representative's annual National Trade Estimate Report on Foreign Trade Barriers also stipulates that most of the tariffs between the two countries have been removed. 'The KORUS entered into force on March 15, 2012. Korea immediately eliminated duties on nearly 80 percent of bilateral trade in industrial and consumer goods,' it said. 'Duties on most other such goods were phased out in stages over 10 years and have been eliminated as of Jan 1, 2021.' Then why did Trump resort to such a claim? What was his actual motive behind it? 'Trump has long expressed dissatisfaction with the trade deficit with South Korea,' said Han Ah-reum, a senior researcher at the Korea International Trade Association, noting that his claim about a fourfold tariff difference appears to be in reference to the MFN rates, not FTA rates. 'Ultimately, this appears to be an attempt to apply pressure on South Korea by citing tariff rate differences that are not actually in effect,' she said. Shin Won-kyu, a researcher at the Korea Economic Research Institute, echoed a similar stance and stressed the need to read between the lines and grasp Trump's actual strategy. 'Trump appears to (be attempting to) maintain a position of leverage (over South Korea) by stressing the issue. His claim is not entirely baseless since there is indeed a fourfold difference in average tariff rates. But (since that doesn't apply in US-South Korea trade,) he is presenting it in a way that fosters anxiety and misunderstanding,' said Shin. 'So it is important to figure out what his real demands are, which is to address the trade deficit and defense cost-sharing. Rather than getting caught up in the 'four-times' claim, it is important to recognize the broader strategy at play.' Right after mentioning South Korea, Trump talked about plans to impose 'reciprocal tariffs' which he claims will address the US' trade imbalances. 'April 2, reciprocal tariffs kick in, and whatever they tariff us, other countries, we will tariff them. That's reciprocal, back and forth,' said Trump in the March 4 speech. Trump has a longstanding view that the US trade deficit ― which means the US imports more than it exports ― is the result of unfair trade policies by other countries. The US, which has run a consistent trade deficit since 1976, hit a high of $1.2 trillion in trade deficit last year. The US posted a $66 billion trade deficit with South Korea last year, according to US figures, making Korea the ninth largest contributor to this figure in the US. The figure is hard to miss for Trump, who is fixated on shrinking this deficit. But the number itself is not the whole story, according to many experts. A big chunk of South Korea's imports to the US consist of intermediate goods ― things like semiconductors, battery components, displays and steel that are used to make other products ― that are essential for US manufacturing. Data from the Export-Import Bank of Korea shows these materials accounted for over half of South Korea's exports to the US during both the first Trump term and Biden's term. Over the past three years, Korean conglomerates like Samsung, Hyundai, SK, LG and Hanwha have injected over $114 billion into the US, building plants and creating jobs. The recent uptick in the trade deficit reflects the local materials being shipped in to construct these new facilities. Another reason behind the US' record trade deficit is the strong US dollar, which makes it more expensive for other countries to buy American products while making imports cheaper. Many agree it is important for South Korea's government officials to explain the reality behind the numbers and negotiate so that Korea won't be disadvantaged. Since Trump's inauguration, South Korean business and government officials have been rushing to the US to meet with Trump administration officials, requesting that South Korean businesses not face disadvantages via Trump's tariffs. South Korea's National Security Adviser Shin Won-shik was the latest to visit Washington. Shin met with his US counterpart Michael Waltz on Thursday and explained that tariffs are barely imposed on US goods under the FTA. His explanation was said to have met with understanding from Trump's national security adviser. Another topic Trump touched on during this March 4 speech was nontariff barriers, which restrict imports or exports of goods or services by means other than duties. 'If they do nonmonetary tariffs to keep us out of their market, then we will do nonmonetary barriers to keep them out of our market,' he said while talking about his April 2 reciprocal tariff plans. Experts also stress that trade relations between Seoul and Washington are not just about tariffs but also involve nontariff barriers. 'The US has consistently raised concerns about South Korea's regulatory environment in its annual National Trade Estimate report,' said Han. 'Issues such as technical barriers to trade and various regulations have been cited as obstacles for American businesses. She noted that some US policymakers have voiced concerns about South Korea's proposed online platform regulations, claiming that they would be "unfair" to Big Tech based in the US. "Some US political circles have been sending messages mixed with complaints that the Platform Competition Promotion Act is a 'discriminatory' measure targeting (US) Big Tech companies. These people see it (Trump's threat of reciprocal tariffs) as a means of pressuring people (in Korea) to ease these regulations," she said. Another potential point of conflict in nontariff barriers is the value-added tax system, which Trump previously stated that the US will treat the same as tariffs for purposes of calculating reciprocal tariffs. 'We will consider countries that use the VAT system, which is far more punitive than a tariff, to be similar to that of a tariff,' Trump posted on Truth Social, the social media platform he owns, last month. South Korea imposes a flat 10 percent VAT on both imports and domestically manufactured goods, applying it at every stage of the supply chain. In contrast, the US does not have a VAT system but applies a sales tax system, which varies by state and is only charged at the final point of sale to consumers. While Trump's stance on VAT appears primarily aimed at the European Union ― where the average VAT rate is around 20 percent, far higher than the typical US sales tax ― observers warn that Korea could also find itself in the crosshairs. 'The US doesn't have a national-level VAT, but state-level sales taxes that generally hover at around 10 percent," said KERI researcher Shin. 'This fundamental difference (created by the different methods of) taxation (in the US vs. in South Korea) could potentially be framed as 'discriminatory,' even though VAT is refundable to businesses, including foreign firms that have entities in Korea.'
