Trump declares end of free trade, signaling shift toward economic nationalism

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Trump declares end of free trade, signaling shift toward economic nationalism

Published: 04 Apr. 2025, 00:00

Audio report: written by reporters, read by AI

U.S. President Donald Trump holds a signed executive order after delivering remarks on reciprocal tariffs during an event in the Rose Garden entitled ″Make America Wealthy Again″ at the White House in Washington on April 2. [AFP/YONHAP]

U.S. President Donald Trump has unveiled a sweeping plan to impose reciprocal tariffs on countries around the world, marking what many see as a formal break from the era of postwar free trade. While Trump celebrated April 2 as a “day of liberation,” critics argue it may be remembered instead as the day the global trade system began to unravel.

In a sharply worded editorial, The Wall Street Journal warned that the measures could “blow up the global trade system,” adding that the new economic era Trump envisions is unlikely to materialize. Other media outlets voiced similar concerns, citing risks to both the U.S. economy and global growth.

Analysts say tariffs are likely to drive up consumer prices in the United States, with the poorest households hit hardest. Because low-income households spend a larger share of their income on essential goods, they are more vulnerable to price increases triggered by import taxes. Economists also warn that insulating domestic industries from foreign competition could erode their long-term competitiveness, increasing the risk of stagnation.

Abroad, Trump’s move may weaken U.S. leadership in the global economy and accelerate the rise of China’s influence, particularly among developing nations and in the Asia-Pacific. Ironically, Washington’s aggressive trade posture could end up deepening the very geopolitical divides it seeks to address.

For Korea, the economic fallout could be significant. As a country heavily reliant on exports to the United States, Korea faces the dual risk of direct tariffs and secondary effects from global trade disruption. If other nations retaliate with their own tariffs, a broader trade slowdown could follow.

Particularly troubling for Seoul is the apparent sidelining of the Korea-U.S. FTA. The pact was ratified in 2011 only after intense political turmoil that included clashes in the National Assembly and the use of tear gas during debates. Koreans may view the erosion of the agreement as a betrayal of hard-earned diplomatic ground.

Prime Minister Han Duck-Soo, serving as acting president, faces mounting pressure to secure concessions before the new measures take full effect. Notably, the United States has exempted goods under the United States-Mexico-Canada Agreement from reciprocal tariffs, raising questions about why Korea's FTA is treated differently.

The Korean government has proposed a 10 trillion won ($6.86 billion) supplementary budget to support businesses affected by the trade dispute. In the longer term, officials emphasize the need to diversify export markets and invest in advanced industries to remain competitive in an increasingly protectionist world.

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