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Trump’s second term threatens free trade and multilateralism

Published: 24 Apr. 2025, 00:02

Lee Joo-hyung

The author is an attorney and a professor of law at the University of Seoul

This year marks the 80th anniversary of the United Nations and the 30th anniversary of the World Trade Organization (WTO). But instead of celebration, multilateralism and free trade are facing a serious test under the second Donald Trump administration.

Finance Minister Choi Sang-mok walks through the departure hall of Incheon International Airport on Tuesday as he heads to Washington to attend the Korea-U.S. ″2+2″ trade meeting and the G20 Finance Ministers’ Meeting. At the airport, protesters hold placards opposing Finance Minister Choi's planned trade negotiations with the United States, calling for the suspension of the upcoming talks. [YONHAP]

As the new administration nears its 100-day mark, the global trade order finds itself on precarious ground. Trump’s revived tariff policy is no longer just a symbol of unilateralism. It has become a game of uncertainty in which negotiating partners struggle to predict the next move.

Korea is already navigating a growing list of U.S. tariff threats. A temporary 25 percent reciprocal tariff suspension remains in effect until July 9, but with only 90 days left, the clock is ticking. Duties of 25 percent are already in place or soon to be applied to steel, aluminum, automobiles, light trucks and electronic components.

The scope of the investigation under Section 232 of the Trade Expansion Act has expanded, too. In addition to semiconductors and pharmaceuticals, copper, timber and even products derived from critical minerals and rare earth elements are under review. No one can say with confidence what will appear on the next tariff list.

Just two days after exempting semiconductors, smartphones and laptops, the Trump administration reversed course, signaling it might reconsider those exemptions. Such volatility makes it nearly impossible for businesses to plan ahead. The administration’s approach appears too erratic to be called strategic and too emotional to be considered deliberate.

Yet amid the confusion, one shift stands out: China’s response has changed significantly since Trump’s first term. Eight years ago, a host of U.S. trade partners — including the European Union, Canada, Turkey and China — responded to tariffs by filing complaints with the WTO. This time, Beijing alone has filed a challenge against Washington with the WTO while others remain hesitant.

China has positioned itself as a reluctant champion of free trade, countering tariffs within the WTO framework. It has also bolstered its Anti-Foreign Sanctions Law and proposed a regional “community of shared destiny” to rally support from neighboring countries.

A recent social media post by Chinese Ambassador to Korea Dai Bing underscored Beijing’s tone. In a viral video, a sheep labeled “USA” charges another labeled “China,” only to be knocked down itself. The message: China will not bow to U.S. pressure and will ultimately prevail in the trade war.

Indeed, tariff escalation between the two powers has been aggressive. U.S. tariffs on Chinese goods have reached up to 245 percent, while China's retaliatory tariffs stand at 125 percent. The United States faces political time constraints, with midterm elections in November 2026. But China, with its one-party system, appears ready for a drawn-out battle.

Still, if China loses access to the U.S. market, it may fall back on mass dumping to relieve oversupply — putting neighboring economies like Korea at direct risk. With a U.S.-Korea “2+2” trade and finance dialogue scheduled for April 24, Seoul must approach its options carefully.

First, Korea should assess U.S. requests — such as liquefied natural gas purchases, cooperation in shipbuilding and investment in the Alaska pipeline — not as burdens but as strategic opportunities. Some proposals could actually strengthen Seoul's supply chain resilience.

Second, Korea must focus more on itemized tariff exemptions than on the overall tariff framework. Japan is already ahead in negotiating auto and steel tariff relief. Seoul would do well to observe Tokyo’s strategy and refine its own approach accordingly.

Japan's minister of economic revitalisation, Ryosei Akazawa, arrives at Prime Minister Shigeru Ishiba's official residence in Tokyo on Oct. 1, 2024. [REUTERS/YONHAP]

Third, Korea should accelerate its bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Diversifying export markets and investment destinations will reduce the dependency on any single economy. Domestically, Seoul must step up antidumping measures to protect against a surge of underpriced Chinese imports.

As Trump’s second-term trade policies fuel a storm of uncertainty, Korea must adjust its sails with even greater precision. Balancing short-term diplomatic pressures with long-term economic resilience will be critical.

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