SEOUL: US tariffs on South Korean products may still be open to renegotiations, experts at The Heritage Foundation say, stressing the alliance is strong enough to weather trade-related turbulence and could become even more economically integrated as a result.
In an interview with The Korea Herald, Derrick Morgan, executive vice-president at the conservative think tank in Washington, said there is “certainly hope” for revisions, particularly on intermediate goods such as steel that are critical to make American manufacturing more competitive.
“No deal is final until all pieces are final. Even final deals sometimes are renegotiated,” said Morgan.
“It has to be a fluid situation, and we have to push for free and fair trade at the same time.”
Anthony Kim, a research fellow at The Heritage Foundation, echoed Morgan’s view that there is room for further exemptions or reductions in the tariffs, citing shipbuilding and energy as areas where the two countries could expand cooperation.
“South Korea is the only country which can talk about shipbuilding and nuclear energy cooperation in a practical sense,” said Kim.
“And in terms of ensuring that cooperation, I think we can talk about further exemptions and reductions. So we do have space to talk about further reductions,” he added.
The remarks come as Seoul faces a 15% tariff imposed by Washington.
The rate is lower than the initially proposed 25% – reduced under a deal tied to Seoul’s US$350bil investment pledge in the United States – and lower than those applied to some other trading partners.
Still, it marks a significant increase for Seoul, which had long enjoyed near-zero tariffs under the bilateral free trade agreement.
Beyond these “reciprocal tariffs,” South Korea’s export-dependent economy is also under added strain from 50% duties on steel and aluminium.
The impact was immediate: steel exports to the United States plunged more than 25% in July from a year earlier, according to the Korea International Trade Association.
With higher tariffs also covering steel-derived products, such as machinery, automotive components and electronic devices that contain steel, concerns are mounting that the fallout could ripple across South Korea’s broader export sectors, well beyond steel manufacturing.
While tariffs have spawned anxiety, both experts emphasised that the South Korea-US alliance, built over 75 years, is far stronger than any trade tensions.
“The alliance is definitely strong enough to withstand, hopefully temporary short-term tariff fluctuations and negotiations,” said Morgan, noting that the alliance has endured “ups and downs” and will persist because of shared values and goals.
Kim added that the tariff situation could even create a unique opportunity for deeper ties.
“Yes, it’s uncomfortable, but that doesn’t mean our alliance and partnership will fail because of the presence of the new tariffs,” he said.
“I think this actually makes the two countries more integrated when it comes down to true investment and true economic activity.”
Morgan stressed that Korean companies’ investments in the United States – ranging from autos to semiconductors and batteries – are “critical to the US Economy” and widely appreciated not only in Washington, but also across local communities, particularly in southern, pro-business states. —The Korea Herald/ANN
