“In his first address to Congress since taking office, President Donald Trump specifically highlighted South Korea as a country from which the U.S. faces ‘losses’ in foreign relations, raising expectations of repercussions.
On the 4th (local time), during his speech before a joint meeting of Congress at the Capitol in Washington D.C., President Trump remarked, ‘Countless countries impose much higher tariffs on us than we do on them. It’s very unfair,’ mentioning India and China, and then claimed, ‘South Korea’s average tariff is four times higher (than that of the U.S.).’ He added, ‘Think about it. Four times higher. We help South Korea militarily and in many other ways, yet this is happening. An ally is doing this.’ However, President Trump did not provide specific evidence for his assertion regarding South Korea’s tariffs being four times higher.
From the U.S. perspective, South Korea is among the top 10 trade partners with whom it has a trade deficit. South Korea ranks eighth in trade surplus, following countries like China, Mexico, Vietnam, Ireland, Germany, Taiwan, and Japan. Last year, South Korea’s trade surplus with the U.S. amounted to $55.7 billion (about 81 trillion won). However, since South Korea and the U.S. have a Free Trade Agreement (FTA) in place, no tariffs are imposed on the majority of goods. President Trump’s claim about South Korea’s tariffs being four times higher is inconsistent with facts and might be based on the South Korean value-added tax, which he equates to a tariff. It seems he perceives trade relations with South Korea as an ‘uneven playing field.’
Furthermore, President Trump’s mention of military support to South Korea is significant. Previously, he has claimed that economic relations with allies are worse for the U.S. than those with adversaries, often citing Europe. Still, he focused on South Korea this time. If the South Korean government does not correct President Trump’s perception, it could face considerable economic and security pressure. There is the possibility that high tariffs might be applied to South Korea under the ‘reciprocal tariffs’ policy Trump plans to announce on April 2nd. President Trump has already indicated that he would consider tariffs and non-tariff barriers like government subsidies and value-added taxes in determining reciprocal tariffs. In future negotiations between South Korea and the U.S., the American side may raise issues about tariffs as well as discuss the reduction of U.S. troops in Korea and a substantial increase in Korea’s share of the defense costs for the troops stationed there.
In contrast, President Trump also spoke about South Korea and Japan’s potential involvement in developing an Alaskan natural gas pipeline and promised to create a White House organization related to shipbuilding, offering tax benefits. This could present positive aspects for South Korea in navigating its relationship with the U.S., as Alaskan natural gas imports or participation in its development could help alleviate trade imbalances. Additionally, collaboration in the shipbuilding sector, critical in the U.S.-China strategic competition and an area of strength for Korea, could underscore the importance of U.S.-South Korea security and economic cooperation.
Meanwhile, in his speech, President Trump made no mention of relations with North Korea or Kim Jong-un, the Chairman of the Workers’ Party of Korea.”