Home > Opinion > Columns

Negotiating Trump's trade pressure as 'Team Korea'

Published: 03 Mar. 2025, 00:00

Lee Jae-min

Lee Jae-min
The author is the professor of International Law at the Seoul National University Law School.

"If you invest more than $1 billion, we will process it through a fast-track review."

This was the statement made by U.S. Secretary of Commerce Howard Lutnick when he met with Korean business executives on Feb. 21. While it appears to encourage investment in the United States, Korean companies struggling with relentless U.S. tariffs are left confused. Does this mean such investments will be rewarded with tariff exemptions? Or, is this simply a separate matter, with investment being one thing and tariffs another?

Over the past eight years, Korea has invested more than $160 billion in the United States, becoming its largest investor since 2023. The issue now is not the investment itself, but the conditions attached to it and what follows afterward. Yet, without addressing these concerns, the U.S. is once again urging large-scale investments. Their true intentions remain unclear.

This is precisely why Korea's public-private cooperation is more crucial than ever. Trade experts unanimously emphasize that overcoming Trump's all-out trade offensives requires mobilizing all available resources and strategically aligning every possible option. This can only be achieved through a well-coordinated, public-private partnership — a domain where Korea has traditionally excelled.

However, it is concerning to see various companies, industries and organizations attempting to engage with different U.S. entities through separate channels out of desperation over the tariff storm. While it is natural to deploy every means to gather real-time information, all relevant intelligence must ultimately be consolidated — by the government. The government must be the entity that processes, selects and coordinates this information before sending officials equipped with responses and alternatives to engage with their U.S. counterparts. Only then can Korea maximize its negotiating power.

US President Donald Trump speaks in the Oval Office of the White House as he announces reciprocal tariffs, in Washington, DC, on February 13, 2025. Trump announced that he would impose ″reciprocal tariffs″ on trading partners, opening new fronts in his trade war. The move would match US tariff rates on imports to the levels that other countries impose on US goods.[AFP/Yonhap]

For the time being, it is essential to centralize all negotiation efforts through the government. If individual companies begin pledging investments and announcing factory constructions on their own, it may work out well for them individually but could be detrimental to Korea as a whole.

Public-private cooperation must also operate within this framework. The concept of "Team Korea," which has been widely discussed recently, should not mean that the private and public sectors each take different paths and try various approaches separately. The roles of businesses and the government are distinct. Responsibilities must be clearly divided, but in the end, it is the government that must make decisions, take decisive action and engage in diplomatic persuasion. In "Team Korea," the government is both the coach and the captain — especially in the current circumstances.

Looking back, had the Korean government secured commitments when companies were making recent investments in the United States, those commitments might now be wavering. Nonetheless, Korea's negotiating position would have been stronger than it is today. This is why it is imperative that the government takes the lead in finalizing and coordinating all major economic decisions.

US President Donald Trump listens as Commerce Secretary nominee Howard Lutnick (right) speaks in the Oval Office of the White House as he announces reciprocal tariffs, in Washington, DC, on February 13. [AFP/Yonhap]

Unfortunately, amid these urgent developments, the Korean government appears to be taking a step back, observing from the sidelines rather than actively engaging and leading. It is as if it is cheering on its players from the bench. In response to U.S.-related trade issues, the government recently established the Foreign Economic Affairs Meeting to facilitate swift discussions among relevant ministers. While a commendable move, the question remains, can a mere meeting truly navigate this crisis? Isn't there room to create a more empowered body? This entity should serve as the platform where key negotiations and decisions take place, including those related to U.S. investments.

Ordinarily, such an approach might seem unconventional. Businesses typically operate independently from the government. However, the current situation demands a shift in thinking. Public-private cooperation has now entered its 2.0 era.

The U.S. Trade Representative (USTR) has begun preparations for reciprocal tariffs, collecting opinions from American companies and organizations until March 11. Based on these submissions, new tariffs will be imposed starting April 2. Given the short window of time, decisions on country-specific tariffs will likely be made hastily, leaving room for misunderstandings and misinformation regarding Korea. Instead of waiting for the United States to reach out, Korea must proactively prepare its case now. The USTR's March 2024 country report already lists 18 complaints against Korea. At the very least, Korea should internally review these issues and swiftly engage in negotiations by mid-March. Only the government can take the lead on this. While businesses can assist, the ultimate solution lies in government action.

If time is the issue, negotiations should at least focus on delaying the April 2 deadline. Securing even a one-month extension could buy Korea crucial time. Canada and Mexico set a precedent for this in early February.

"The government's trade response capabilities are now being put to the ultimate test," said Acting President Choi Sang-mok at a Cabinet meeting on Feb. 18. That statement is entirely accurate.

Senior Counselor to the President for Trade and Manufacturing, Peter Navarro (left), speaks after President Donald Trump (R) announced reciprocal tariffs, in the Oval Office of the White House in Washington, DC, on February 13. Trump announced that he would impose ″reciprocal tariffs″ on trading partners, opening new fronts in his trade war. The move would match US tariff rates on imports to the levels that other countries impose on US goods. [AFP/Yonhap]

Translated using generative AI and edited by Korea JoongAng Daily staff.