Trump pushes for reciprocal taxKorea could face higher taxation on importing products into the United States after U.S. President Donald Trump announced Monday that he will push for a so-called reciprocal tax.
“We’re going to be doing very much a reciprocal tax,” said Trump on Monday at a White House event to introduce a proposed infrastructure plan.
“And you’ll be hearing about that during the week and during the coming months.”
Trump accused long-standing allies like Korea and Japan of being unfair trade partners that have created a huge trade deficit with the United States.
“We cannot continue to let people come in our country and rob us blind and charge us tremendous tariffs and taxes, and we charge them nothing,” Trump said. “We can’t allow that to happen,” he added, while noting that the United States has been losing vast amounts of money from trading with China, Japan and Korea.
“They understand where I’m coming from,” Trump said. “It’s a little tough for them because they’ve been getting away with murder for 25 years.”
Trump said the unbalanced trade is affecting the U.S. economy and its workers and vowed to change relevant policy in the favor of the United States.
When Trump asked U.S. Commerce Secretary Wilbur Ross about the prospect of reciprocal tax, Ross answered “sure,” adding, “We gave away so much unilaterally that we really have to claw it back.”
This is not the first time the U.S. government has tried to impose higher taxes on its trading partners.
Republican congressmen in the U.S. House of Representatives last year proposed a 20-percent border-adjustment tax on imported goods. However, the suggestion was met with strong protests from U.S. retailers and trade associations, with the National Retail Federation calling it a “bad tax” as it would drive up prices of many products used by American consumers and lead to inflation.
The Korean government has not yet made any comments regarding the issue.
The United States has been raising its protectionism since the beginning of the year, including imposing higher tariffs on imported washing machines and solar panels - products Korea has a major market share of.
Although the United States continued to see its trade deficit expand even under the watch of Trump, reaching $566 billion, the largest since 2008, the deficit with Korea has been shrinking.
In fact, according to a U.S. commerce department report released last week, the trade deficit with Korea last year shrunk 20 percent to $29.9 billion, the lowest in four years.
Additionally, Korea is currently in negotiations with the U.S. government on reforming the bilateral free trade agreement.
BY LEE HO-JEONG [email@example.com]