Park Jung-won

A little more than a month into U.S. President Donald Trump’s second term, the world is reeling from his changes to U.S. policy. On the trade front, his imposition of (or threats to impose) tariffs on multiple trade partners — including U.S. allies — threatens to upend decades of established economic order. And in the security realm, Trump’s eagerness to end the war in Ukraine without serious repercussions for Russia could set a precedent that makes preserving peace in the world’s potential conflict zones, including the Korean Peninsula, far more difficult.

The reciprocal tariffs the Trump administration plans to impose starting April 2 go beyond merely matching tariff levels; they also encompass non-tariff barriers such as subsidies and various regulations. The South Korea-U.S. Free Trade Agreement already eliminates tariffs on most goods traded between the two countries. However, Trump’s proposal to impose a 25 percent reciprocal tariff on all imported steel and aluminum is expected to impact all countries, including South Korea. The U.S. is South Korea’s number one export destination, and South Korea relies on exports for its economic livelihood.

Furthermore, the U.S. has raised issues with South Korea’s value-added tax (VAT), claiming it disadvantages American companies. The U.S. aims to address this by imposing reciprocal tariffs. However, labeling it as a tariff is problematic since VAT is applied to both imported and domestically produced goods.

Considering VAT as a tariff and proposing reciprocal tariffs on countries........

© The Korea Times