[fn Editorial] Start of Tariff Upheaval, Open a Path with Bold Changes

The reciprocal tariffs of the United States will be imposed in earnest from the 7th. The moment when the high tariffs, which President Donald Trump of the United States pushed like a runaway train, become a reality is imminent. A 15% tariff will be imposed on major countries, including Korea, while the remaining countries will face a 41% high tariff bomb. Apart from tariff policies, Japan, the European Union (EU), Korea, etc., have to pour hundreds of billions of dollars into the United States. All countries express silent regret over the unilateral tariff imposition by the United States to seize economic security hegemony. It is also a moment when the free trade ideology maintained for decades faces historical regression.

Nevertheless, we must accept the harshness of the international dynamics where the logic of power prevails. Rather, we must turn this crisis into an opportunity to leap forward for our economy. To do this, unique wisdom and a dynamic mindset are needed. When comparing the tariff levels with Japan, the EU, etc., which are competing in exports to the United States, Korea can be seen as standing on the same starting line. It is neither advantageous nor disadvantageous. If the management innovation of Korean companies and the dynamic support of the government back it up, it is an environment worth trying.

It is necessary to closely monitor the aftermath that the unilateral tariff policy of the United States will bring. Although the imposition of tariffs by the United States will immediately contribute to the US finances, it will ultimately lead to price burdens on US companies and consumers. The profits gained by force by the United States may boomerang back as domestic inflation and the decline in competitiveness of US companies. The US tariff policy contains uncertainties that can change at any time depending on its impact on the domestic economy.

The itemized tariff imposition that President Trump will announce next week is a worrying variable. President Trump said, "Initially, a slight tariff will be imposed on our main export items such as semiconductors and pharmaceuticals, but it will be raised to 150% after one year and 250% thereafter." If itemized tariffs are added, a substantial blow to our companies is inevitable.

These reciprocal and itemized tariff impositions must be coldly examined from a comparative advantage perspective regarding their impact on our companies and competing countries. The core goal of the US tariff policy is to outpace China's pursuit and establish a new supply chain. Therefore, amidst the clash between the US and China, we must take a pragmatic route that aligns with our national interest.

As a result, we stand at a huge historical inflection point where the paradigm of the global trade order is fundamentally overturned. The free trade system, which has been maintained for decades through tariffs to protect national interests, is regressing, and a new rule that we have never experienced before is replacing it.

At this point, where the existing trade order is shaking, we must seize the golden opportunity to take the lead in the new market. The important thing is a proactive strategy rather than a passive response. Instead of being swayed by the US tariff policy, we must use this as an opportunity to fundamentally change the structure of our economy.

To this end, we must first firmly organize the internal affairs of our economy. A massive structural reform of outdated industries with declining competitiveness and bold investments in advanced industries such as artificial intelligence (AI) must be prioritized to qualify as a leader in the global market. In addition, during the process of reorganizing the global value chain, a massive innovation in production and logistics as a whole must be carried out. We must take the Trump-triggered tariff wave as a turning point for a leap forward.