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Don’t grab a golf club without a secret card

Published: 27 Nov. 2024, 19:27

KIM KI-HWAN
The author is a business news reporter of the JoongAng Ilbo.

Trump, who referred to Korea as a “money machine,” has been elected as the 47th president of the United States. No one would interpret it as a compliment for a rich country. Trump is a businessman to the core who can shake the 70 years of the Korea-U.S. alliance for money. It should be seen as a warning message to get money out of Korea.

Immediately after his election, the Ministry of Trade, Industry and Energy explained that it has set up a “U.S. presidential election task force” since March to discuss countermeasures. “We have set up a strategy to respond calmly as uncertainties increasingly grow in the trade environment,” said a ministry official. “Our response will be ‘tit-for-tat,’ customized for each situation so we can counter a light move with a light measure and a strong blow with a strong measure.”

Can we trust that the calm preparation behind the scenes? It reminded me of the first Trump administration during the Moon Jae-in administration in July 2019. At the time, Trump warned 11 countries including Korea that they should not be given preferential treatment as World Trade Organization (WTO) developing countries. There were concerns that Korea would get less agricultural tariff benefits.

The Ministry of Agriculture, Food and Rural Affairs said an international discussion for exclusion from the tariff reduction has been halted for more than 10 years and that it is not likely to happen. It argued that the tariff rate could not be changed bilaterally with the United States and should go through consensus among WTO countries. In short, it claimed that things won’t go as Trump said. However, Korea surrendered after three months. The Korean government gave up the WTO developing status in October that year.

If we just trust the government, we can be stabbed in the back. In order not to repeat the mistakes from the first Trump administration, the government should go further than vain hopes and a complacent response. A deal is made only when you can offer something in return. The core of responding to the second Trump trade policy is to have industrial competitiveness. Right after the election, Trump spoke on the phone with President Yoon Suk Yeol for 12 minutes, and he asked about the shipbuilding industry because of its technological prowess. Korean automobile and semiconductor industries are expected to struggle in the Trump administration as they don’t have the dominant competitiveness needed to have an upper hand in the deal.

Let’s put aside the bitterness of being called a money machine. Korea’s Samsung Electronics, Taiwan’s TSMC and the Netherlands’ ASML are the competitive edges of small yet powerful countries. If the government and businesses work together to build competitiveness, our value would naturally increase. The president needs to practice golf to get along with Trump. However, it is only a bonus in the dealmaking. I hope Yoon doesn’t grab a golf club without a card that could tempt Trump.