{"id":2208390,"date":"2025-02-14T18:09:22","date_gmt":"2025-02-14T09:09:22","guid":{"rendered":"https:\/\/koreapro.org\/?p=2208390"},"modified":"2025-02-14T18:16:03","modified_gmt":"2025-02-14T09:16:03","slug":"how-south-koreas-next-president-will-likely-respond-to-trumps-tariffs","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2025\/02\/how-south-koreas-next-president-will-likely-respond-to-trumps-tariffs\/","title":{"rendered":"How South Korea\u2019s next president will likely respond to Trump\u2019s tariffs"},"content":{"rendered":"

South Korea must decide how to respond as U.S. President Donald Trump pushes ahead with his <\/span>reciprocal tariff policy<\/span><\/a>, threatening to match the duties imposed by trade partners on American exports.<\/span><\/p>\n

Trump\u2019s latest move, announced on Friday, amplifies uncertainties for South Korea\u2019s export-driven economy, with Washington targeting key industries such as steel, automobiles and semiconductors.<\/span><\/p>\n

While Acting President Choi Sang-mok has <\/span>downplayed<\/span><\/a> immediate risks, the real decisions will fall to the next administration, as South Korea potentially heads toward a snap election that could bring either Lee Jae-myung\u2019s Democratic Party (DP) to power or a new leader from the ruling People Power Party (PPP).<\/span><\/p>\n

The outcome will shape Seoul\u2019s approach to trade and its response to Trump\u2019s escalating trade protectionism.<\/span><\/p>\n

\"\"

Acting President Choi Sang-mok (left) presides over a meeting to discuss external pressures while seated next to industry minister Ahn Duk-geun (right), Feb. 14, 2025 | Image: ROK Ministry of Economy and Finance<\/a><\/em><\/p><\/div>\n

CHOI SANG-MOK\u2019S INTERIM STRATEGY<\/b><\/p>\n

As the head of a caretaker government, Acting President Choi has sought to minimize market disruption, framing Trump\u2019s tariff threats as a negotiating tactic rather than an immediate crisis. His administration has emphasized diplomatic engagement, betting that <\/span>quiet backchannel negotiations<\/span><\/a> will prevent South Korea from being drawn into an all-out trade war.<\/span><\/p>\n

Choi has also leaned on the U.S.-ROK Free Trade Agreement (KORUS) to argue against punitive tariffs, highlighting South Korea\u2019s previous concessions in the 2018 renegotiation under Trump\u2019s first term.<\/span><\/p>\n

This strategy assumes that South Korea can secure exemptions or mitigate the damage through negotiations. However, it does not address the structural risks posed by a second Trump administration, which has already shown a willingness to <\/span>override past agreements with allies<\/span><\/a> \u2014 including Trump\u2019s own U.S.-Mexico-Canada Agreement \u2014 in pursuit of protectionist policies.<\/span><\/p>\n

Choi\u2019s approach is inherently limited. As an unelected caretaker, he lacks the political capital to make bold commitments or push through substantive policy shifts. His strategy hinges on maintaining stability until a new administration takes office.<\/span><\/p>\n

But with Trump\u2019s tariffs set to take effect sooner rather than later, the next South Korean president will be forced to make crucial decisions early in his term.<\/span><\/p>\n

\"\"

Main opposition Democratic Party leader Lee Jae-myung meets with export company representatives, Feb. 11, 2025 | Image: Democratic Party of Korea<\/a><\/em><\/p><\/div>\n

LEE JAE-MYUNG\u2019S PRAGMATISM<\/b><\/p>\n

If Lee Jae-myung becomes South Korea\u2019s next president, his recent pivot toward <\/span>economic and foreign policy pragmatism<\/span><\/a> suggests he may adopt a flexible approach to trade negotiations.\u00a0<\/span><\/p>\n

For instance, while he has been <\/span>critical<\/span><\/a> of increased defense cost-sharing and U.S. economic pressure in the past, Lee may soften his stance on this issue to signal a willingness to engage Washington on economic matters.<\/span><\/p>\n

The U.S. and South Korea signed a <\/span>five-year defense cost-sharing agreement<\/span><\/a> under the 12th Special Measures Agreement (SMA) in October, setting South Korea\u2019s 2026 contribution for the stationing of U.S. forces at $1.13 billion (1.6 trillion won), an 8.3% increase from 2025.<\/span><\/p>\n

Lee may preempt Trump\u2019s demand to renegotiate the SMA in Washington\u2019s favor or even offer to purchase additional U.S. weapons, such as Boeing\u2019s Apache attack helicopters \u2014 a plan that Seoul is currently <\/span>reassessing<\/span><\/a>.<\/span><\/p>\n

Lee could also attempt to recalibrate South Korea\u2019s trade strategy by emphasizing job creation and industrial policy over ideological alignment. This would likely include efforts to secure concessions on reciprocal tariffs by offering targeted cooperation in areas like semiconductor supply chains and energy security.<\/span><\/p>\n

However, Lee is unlikely to resort to outright reciprocal tariffs on U.S. imports. The DP is <\/span>closely tied<\/span><\/a> to South Korea\u2019s agricultural sector, which would be among the hardest hit if Trump were to retaliate against any ROK countermeasures. If Lee introduces retaliatory tariffs on American goods, he would risk backlash from a key constituency group.<\/span><\/p>\n

Another factor is South Korea\u2019s positioning in the global semiconductor war. While Seoul has benefited from the U.S. push to reduce reliance on Chinese chipmakers via the Biden administration\u2019s <\/span>CHIPS Act<\/span><\/a>, Trump is reportedly shifting toward aggressive industrial policy favoring U.S. firms.<\/span><\/p>\n

Digitimes Asia<\/span><\/i> reported<\/span><\/a> recently that Trump\u2019s team is negotiating a deal to secure production and technology transfers from Taiwan\u2019s TSMC to Intel, which, if true, would signal a long-term strategy to build up a domestic semiconductor ecosystem at the expense of foreign suppliers \u2014 including South Korea\u2019s Samsung Electronics and SK Hynix.<\/span><\/p>\n

Lee\u2019s response will likely focus on reinforcing South Korea\u2019s role as a critical chip supplier while negotiating exemptions from U.S. tariffs. His government could also attempt to diversify export markets, increasing ties with the European Union and Southeast Asian countries to limit the country\u2019s exposure to the U.S. market.<\/span><\/p>\n

But such a shift would take years, and in the short term, South Korea remains deeply tied to U.S.-led supply chains.<\/span><\/p>\n

\"\"

Ruling People Power Party floor leader Kwon Seong-dong (right) and interim party leader Kwon Young-se (left), Feb. 13, 2025 | Image: People Power Party<\/a><\/em><\/p><\/div>\n

A PPP PRESIDENT\u2019S OPTIONS<\/b><\/p>\n

If the PPP retains power, its candidate would have a different set of constraints and advantages.<\/span><\/p>\n

Unlike Choi, a newly elected PPP president would enter office with stronger political capital, allowing them to negotiate from a position of greater authority. But unlike Lee, he would face pressure to maintain continuity with President Yoon Suk-yeol\u2019s <\/span>pro-U.S. foreign policy<\/span><\/a> while balancing the economic fallout from Trump\u2019s tariffs.<\/span><\/p>\n

A PPP president would likely seek to strengthen security ties with Washington as leverage in economic negotiations. Trump has previously linked trade concessions to defense commitments, and a PPP president may leverage shipbuilding cooperation with the U.S. to mitigate trade risks.<\/span><\/p>\n

The <\/span>SHIPS for America Act<\/span><\/a> stipulates that the U.S. may enter into agreements with treaty allies to maintain sufficient civil, commercial and military sealift capability to counter China\u2019s increased naval capabilities. During a phone call with Yoon shortly after his election win, Trump <\/span>reportedly emphasized<\/span><\/a> such cooperation with Seoul.<\/span><\/p>\n

However, a PPP leader may be more inclined to accept Trump\u2019s tariffs as a cost of maintaining strong bilateral ties. This could lead to policy adjustments favoring U.S. investment in South Korea\u2019s tech sector, particularly in semiconductors and electric vehicle batteries, where the ROK has a competitive edge.<\/span><\/p>\n

However, this approach risks undermining Seoul\u2019s negotiating position, as Trump has shown a pattern of demanding ever-greater concessions from trade partners who avoid direct confrontation.<\/span><\/p>\n

\"\"

U.S. President Donald Trump at the Oval Office, Feb. 14, 2025 | Image: White House<\/a><\/em><\/p><\/div>\n

TRADE WAR OR COMPROMISE?<\/b><\/p>\n

One of the biggest questions is whether South Korea will retaliate if Trump moves forward with reciprocal tariffs regardless of KORUS already ensuring that South Korea does not impose any tariffs on industrial goods imported from the U.S.<\/span><\/p>\n

While the country has historically preferred diplomatic solutions, previous governments have shown a willingness to take countermeasures when necessary. Under President Moon Jae-in, South Korea responded to Japan\u2019s <\/span>export controls on semiconductor materials<\/span><\/a> by removing Japan from its list of preferred trading partners and tightening export regulations, demonstrating that it is not entirely risk-averse in economic conflicts.<\/span><\/p>\n

However, retaliatory tariffs against the U.S. would carry far greater risks. The U.S. remains South Korea\u2019s only strategic ally and the country\u2019s second-largest export market, and a tit-for-tat trade war would exacerbate existing economic pressures, particularly with South Korea already facing <\/span>weak GDP growth projections<\/span><\/a> and <\/span>precarious employment figures<\/span><\/a>.<\/span><\/p>\n

If pressured, Seoul may instead opt for regulatory countermeasures, such as tightening safety standards on U.S. auto imports or scrutinizing American digital services under existing competition laws \u2014 measures that would increase pressure on U.S. firms without sparking an outright trade war.<\/span><\/p>\n

Regardless of who wins South Korea\u2019s presidency, the next administration will need to weigh short-term economic damage against long-term trade stability.<\/span><\/p>\n

Lee Jae-myung\u2019s pragmatic shift suggests he may pursue a more flexible approach, seeking targeted concessions while bolstering industrial policy at home. A PPP president, by contrast, may prioritize security ties with the U.S. as a means of mitigating economic fallout, while avoiding direct confrontation over tariffs.<\/span><\/p>\n

South Korea is in an unenviable position, and its next leader will face difficult choices where every decision carries significant political and strategic consequences.<\/span><\/p>\n

Edited by Alannah Hill<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Defense & Security<\/span><\/a>Inter-Korean & Foreign Relations<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

South Korea must decide how to respond as U.S. President Donald Trump pushes ahead with his reciprocal tariff policy, threatening to match the duties imposed by trade partners on American exports. Trump\u2019s latest move, announced on Friday, amplifies uncertainties for South Korea\u2019s export-driven economy, with Washington targeting key industries such as steel, automobiles and semiconductors. […]<\/p>\n","protected":false},"author":10407,"featured_media":2208391,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[24,26,28],"class_list":["post-2208390","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-business-economy","tag-defense-security","tag-inter-korean-foreign-relations"],"yoast_head":"\nHow South Korea\u2019s next president will likely respond to Trump\u2019s tariffs - Korea Pro<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2025\/02\/how-south-koreas-next-president-will-likely-respond-to-trumps-tariffs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How South Korea\u2019s next president will likely respond to Trump\u2019s tariffs - Korea Pro\" \/>\n<meta property=\"og:description\" content=\"South Korea must decide how to respond as U.S. President Donald Trump pushes ahead with his reciprocal tariff policy, threatening to match the duties imposed by trade partners on American exports. 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