Photo, above: President Trump and President Moon Jae-in of South Korea. Against the advice of many economists, the Trump administration sees the trade deficit with South Korea as a sign that the United States is on the losing end of their economic relationship. CreditDoug Mills/The New York Times
South Korea has become a fairly prosperous nation, by world standards, ranking in the top 20% of per capita GDP countries in the world. That happened primarily due to unfettered access to the American consumer market.
China and Japan have likewise been the beneficiaries of free access to the US consumer market. And it has killed American manufacturers.
Now, there is a new sheriff in town who wants to level the playing field and return America’s wealth to America instead of allowing strangers on the other side of the world to enjoy it. And the South Koreans don’t like the idea. At all!
South Korea’s political leaders are screaming in response to President Trump’s proposed import tariff on raw steel and aluminum, the announcement of which has already stimulated growth activity in those domestic sectors.
The message coming from South Korea seems to be, “Yeah, thanks for keeping us safe for six decades and not charging us a dime for it, but if you don’t allow us to continue screwing your steel and aluminum manufacturers, then we are going to have a serious problem with you.” Such gratitude.
Maybe we should just walk away and let Kim Jong Un have the whole shooting match.
WASHINGTON (NY Times)— President Trump’s plan to impose stiff steel tariffs would severely punish South Korea, a key diplomatic ally and a major exporter of the metal to the United States, at a moment when America is embarking on a series of high-stakes negotiations to defuse tensions on the Korean Peninsula.
North Korea has said that it is willing to begin talks with the United States about abandoning its nuclear weapons, officials from the South said Tuesday, opening the possibility for a breakthrough in one of the world’s most prolonged security stalemates.
If talks materialize, the United States will need the close partnership of South Korea. But in recent months, the Trump administration has alienated the South’s leaders by initiating a series of tough trade measures that seek to penalize the country for exporting more goods to the United States than it imports.
The administration has begun renegotiating its six-year-old free trade agreement with South Korea, a pact that Mr. Trump criticized as a “horrible deal” for the United States. In January, the president levied tariffs against foreign washing machines and solar panels, both major Korean exports.
Last week, the president announced that he planned to impose tariffs of 25 percent on steel and 10 percent on aluminum on imports from all countries. That penalty would fall heavily on South Korea, which is the third-largest exporter of steel to the United States after Canada and Brazil.
“In terms of security issues, this is the time when there should be no daylight between the United States and South Korea, and a time when we should not even be thinking of adding any potential friction to our relationship,” said Wendy Cutler, the vice president of the Asia Society Policy Institute and a former negotiator for the United States trade deal with South Korea. “That’s what these measures do.”
Christopher R. Hill, who negotiated with North Korea for the George W. Bush administration, said, “This is not at all helpful to one of the world’s most delicate negotiations.” He added, “Going after their steel exports at this time is by no means ideal.”
The proposed tariff has rankled allies and shaken economic and security relationships around the globe. It has also put other trade goals, like combating unfair practices from China, at risk. After the tariff announcement, the European Union threatened to cancel a meeting over the weekend with the United States and Japan to discuss efforts to counter China on trade.
The plan has also provoked a sharp backlash from members of the president’s own party and industries that could be hurt by rising prices as a result of the tariffs. In the days since the announcement, opponents have fiercely lobbied the administration to abandon or scale back the measure.
And, of course, no presidential action that favors America would be complete without congressional Rinos joining the Democrats to slam the president for his America First policies which rarely benefit their lobbyist pals….
“There is a lot of concern among Republican senators that this could sort of metastasize into a larger trade war,” Senator Mitch McConnell, the majority leader and Republican of Kentucky, told reporters at the Capitol on Tuesday. “Many of our members are discussing with the administration just how broad, how sweeping, this might be.”
The president has said there may be exceptions. On Monday, he floated the idea of exempting Canada and Mexico if the countries made concessions in a renegotiation of the North American Free Trade Agreement.
At a news conference on Tuesday, the president said the European Union could be exempted if it removed some of the “horrible barriers” that prevent American products from entering its market. “Otherwise, we’re going to leave it as it is,” Mr. Trump said, referring to the tariff plan.
Yet some trade advisers say the administration is unlikely to consider such an exemption for South Korea, which several officials in the White House see as one of biggest global culprits in trade.
That view has stunned the South Korean government, which is used to working closely with the United States on economic and security matters. The United States maintains a large military presence in Seoul, the capital, and it has been a partner on issues like the North Korean nuclear threat and balancing against China’s rise in the Pacific.
Against the advice of many economists, the Trump administration sees the trade deficit with South Korea as a sign that the United States is on the losing end of their economic relationship. That is the major reason American officials have started to renegotiate the United States Korea Free Trade Agreement.
Also, while I was researching per capita GDPs by country, I also ran across this sickening statistic…. The highest per capita GDP in the United States is Washington, DC where the per capita GDP in today’s dollars is $186,172, more than double second-place New York’s per capita GDP of $75,360 and nearly four times the US median per capita GDP of $50,577. Washington was also #1 in global per capita GDP.
What does Washington do? Government. What is the source of its income? You and I.
