Home > Opinion > Editorials

Seoul must respond strategically to Trump’s trade volatility

Published: 11 Apr. 2025, 00:00

A cargo ship sits outside of the Port of Elizabeth marine terminal seen from Bayonne, New Jersey, on April 9. [REUTERS/YONHAP]

Global financial markets have once again been shaken by the unpredictability of U.S. President Donald Trump. Just a day after announcing a sweeping set of reciprocal tariffs, Trump abruptly reversed course, declaring on April 9 that the tariffs would be suspended for 90 days for 75 countries — excluding China. Markets rallied sharply in response.

Analysts interpreted the move as a tactical retreat in the face of market turbulence and domestic pushback. The initial announcement had caused stock markets to tumble and U.S. Treasury yields to spike — an unusual combination, as market downturns typically drive investors toward safer assets like government bonds, lowering yields. The abnormal reaction signaled growing unease about the credibility of U.S. leadership and the stability of the global financial order it has long underpinned.

The deeper concern is not simply the tariffs themselves, but the rising volatility rooted in Trump’s erratic style. When even safe assets like government bonds fluctuate wildly, financial system risk intensifies. The U.S.-China trade dispute is now unfolding as a dangerous game of brinkmanship, and for a trade-dependent country like Korea, the stakes are especially high.

Seoul must avoid reacting passively to each policy shift by Washington. Instead, the government, businesses and the public must treat this period as an opportunity to strengthen risk management. The 90-day reprieve should not be wasted. With Korea in a temporary leadership vacuum until the presidential election in June, there is no need to rush into negotiations, even if the United States seeks early talks with allies like Korea and Japan.

An early agreement may reduce short-term uncertainty, but it also risks tying security and trade together in a package deal — a scenario that rarely benefits the weaker party. Washington’s strategy appears aimed at locking in favorable terms with allies first, then using those deals as leverage against other countries.

Trump’s “strike first, negotiate later” approach is part of a broader tactic designed to unsettle and pressure counterparts. Korea’s response should be calm and assertive. As a country with over 20 FTAs, Korea has the experience and credibility to demand adherence to trade norms and legal procedures. The proposed blanket tariff still violates Article 2.3 of the Korea-U.S. FTA, which prohibits the introduction of new tariffs.

The Korean benchmark Kospi soars on the morning of April 10 after U.S. President Donald Trump announces a 90-day halt on global tariffs, for the exception of China. [JOONGANG SUNDAY]

Negotiations must remain within the legal framework of the FTA. A practical, mutually beneficial package deal — such as cooperation on shipbuilding or liquefied natural gas — could be explored. But the final outcome should be determined under the next administration, which will have the authority and stability to see it through.

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