[fn Editorial] Tariff Negotiations: A Cool and Flexible Approach Between National Interest and Practicality

D-10. The deadline until the 25% reciprocal tariff of the Trump administration in the United States takes effect on the 1st of next month. Howard Lutnick, the U.S. Secretary of Commerce, warned that after the 1st, the basic tariff of 10% will remain, and countries with large economies will be subject to higher tariff rates. It sounds like a demand for surrender as the negotiation deadline approaches. It is an emergency situation where we must mobilize all national power to put out the fire that has fallen on our feet.

On the 20th, Wi Sung-rak, the National Security Office Director of the Presidential Office, who was urgently dispatched to Washington for last-minute tariff negotiations with the U.S., will meet with Marco Rubio, the U.S. Secretary of State, for package negotiations in the security and trade sectors. Koo Yoon-chul, Deputy Prime Minister and Minister of Strategy and Finance, and Kim Jung-kwan, Minister of Trade, Industry and Energy, will also visit the United States this week.

Deputy Prime Minister Koo stated after his inauguration on the 21st, "I will strive to ensure that the tariff negotiations are as successful as possible, in line with national interest and practicality." He will meet with his counterpart, Scott Besant, the Secretary of the Treasury, to attempt to conclude detailed tariff negotiations. Minister Kim also presided over an 'Emergency Trade Inspection Meeting with the U.S.' on the same day and said, "I will strive to achieve the best results from an overall national interest perspective." A delegation from the Korea-U.S. Parliamentary Alliance, composed of ruling and opposition lawmakers, is also active on-site to support trade negotiations.

Tariff negotiations with the United States, our largest trading partner along with China, are like a lifeline for us who 'live by exports.' The U.S. is presenting us with a huge 'bill' in almost every field, making the negotiations challenging. Tariffs have been announced for our main export sectors, such as automobiles (25%) and steel (50%), as well as semiconductors and pharmaceuticals.

The U.S. has demanded the resolution of various non-tariff barriers, including the lifting of beef import restrictions for over 30 months, opening of the rice market, easing of quarantine for fruits and grains, easing of import regulations for genetically modified agricultural products (LMO), and a defense cost-sharing of 10 billion dollars. For us, it's not easy to concede any of these areas. Significant side effects, such as the crisis of related farms, are expected.

Exports, which turned to an increase last month, have returned to a decline within a month, showing a chaotic state in the export market. Exports from the 1st to the 20th of this month amounted to 36.1 billion dollars, a 2.2% decrease compared to the same period last year. Due to the impact of U.S. tariffs, exports of auto parts and steel have shrunk, and exports to the U.S. alone have decreased by 2.1%.

Previously, the U.S. secured 'juicy' benefits such as agricultural market opening and energy import expansion in trade negotiations with the UK, Vietnam, and Indonesia. It is a point that shows the trade negotiation stance of President Trump, who prioritizes performance in the 'MAGA' (Make America Great Again) policy, is focused on the agricultural and energy sectors. It may be a wise strategy for us to acknowledge the unavoidable reality and approach with a cold strategy of 'giving as little as possible and protecting as much as possible.' Ryu Jin, Chairman of the Korea Economic Association, said, "The next two weeks are crucial for the fate of the Korean economy." Our situation is that desperate.

The most important values set forth by the new government's first economic team are 'national interest' and 'practicality.' A flexible approach is needed to protect exports that support the Korean economy and to lower tariff rates.

A cold decision is required to concede what must be conceded for national interest to protect what must be protected. Of course, sufficient persuasion and support measures for areas expected to be affected in the future must follow.