Trump’s MAGA trade policy: A crisis, but also an opportunity for Korea
Published: 29 May. 2025, 00:03
Audio report: written by reporters, read by AI
The author is a former director of the KDI National Development Leadership Program
For decades, emerging industrial economies surged forward by exporting goods to the United States, generating large trade surpluses. Meanwhile, the U.S. economy slipped into persistent trade deficits, weighed down further by ballooning national debt. In a symbolic blow, credit rating agency Moody’s recently downgraded the U.S. credit rating.
Against this backdrop, President Donald Trump returned to office, championing his signature slogan “Make America Great Again” (MAGA). Central to his economic platform is a protectionist trade agenda. Upon resuming office, he imposed sweeping tariffs on countries with large trade surpluses with the United States. The global response has been starkly divided — some industries celebrated, while others panicked.
![A liquefied natural gas (LNG) tanker is tugged towards a thermal power station in Futtsu, east of Tokyo, Japan, November 13, 2017. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/05/29/ee3f8534-4750-4665-b3ee-1bde8609a4ce.jpg)
A liquefied natural gas (LNG) tanker is tugged towards a thermal power station in Futtsu, east of Tokyo, Japan, November 13, 2017. [REUTERS/YONHAP]
On May 1, Labor Day, protests erupted across the United States and in cities around the world opposing Trump’s tariff policies. The unrest marked a sharp reaction to the perceived economic disruption. Trump, within his first 100 days in office, recorded the lowest approval rating among postwar presidents, reflecting domestic unease over his economic approach.
Shortly after the tariff announcements, Harvard University’s Kennedy School hosted a policy seminar titled “Responding to Trump’s Unilateral Tariff Strategy.” Professor Richard Mackin, a featured speaker, argued that Korea has the strength and strategic leverage to withstand the shock of Trump’s policy. “If Korea stops, the world stops,” he said, highlighting the country’s critical role in global supply chains.
Mackin specifically criticized the imposition of high tariffs on Korean-made semiconductors, which are vital to the mass production of autonomous vehicles in the United States. He warned that these tariffs would raise production costs for American carmakers, ultimately reducing the competitiveness of U.S. vehicles. The resulting cost burden, he predicted, could lead to factory closures and significant job losses among skilled American workers in the auto industry.
![Alaska Gov. Mike Dunleavy highlights Korea-U.S. partnership through a video message at the American Chamber of Commerce in Korea's energy forum held at Grand Hyatt Seoul in Yongsan District, central Seoul, on April 18. [AMCHAM KOREA]](https://koreajoongangdaily.joins.com/data/photo/2025/05/29/722c4019-5cd5-4b74-8494-beaf922f885b.jpg)
Alaska Gov. Mike Dunleavy highlights Korea-U.S. partnership through a video message at the American Chamber of Commerce in Korea's energy forum held at Grand Hyatt Seoul in Yongsan District, central Seoul, on April 18. [AMCHAM KOREA]
The question, then, is how Korea should respond. The first step is to understand the intent behind the U.S. stimulus and protection measures. Rather than reactively resisting, Korea should seek to reshape its trade relationship with the United States through mutually beneficial tariff negotiations.
Fortunately, Korea and the United States possess a complementary industrial ecosystem. Korea leads in semiconductor technology and has integrated AI into a wide range of consumer electronics. With this advantage, Korea can position itself as a strategic AI partner to the United States, building on the success of the GE Technology Research Center in Pangyo, Gyeonggi. The Korean government should invest in joint research initiatives to solidify AI cooperation.
Trump’s first address to a joint session of Congress highlighted Korea and Japan as key investment partners in the Alaska LNG project. If collaboration proceeds, Korean steel could be used not only in the construction of pipelines but also in LNG tankers. Korea, in turn, would secure direct access to U.S. energy, enhancing energy stability for its major industrial clusters in Yongin and Pyeongtaek — home to the world’s largest semiconductor complex under development.
The Alaska LNG project aims to transport an estimated 34 trillion cubic feet of natural gas from Prudhoe Bay in northern Alaska to the Nikiski port 1,300 kilometers (808 miles) south. From there, the liquefied natural gas would be shipped to Indo-Pacific countries, including Korea, Japan and Taiwan. The project’s scale is massive, and so are its risks — ranging from financing to potential litigation over environmental impact.
To move forward, the U.S. government will need to mitigate those risks and offer more predictable terms to international investors. If Korea joins this project, it would effectively establish a “Korean energy base” on American soil, comparable in scale and strategic importance to Korea’s $10 billion investment in building the Pyeongtaek U.S. military base over a decade.
![The construction site for a Wonsam chip production plant in Yongin, Gyeonggi, which is part of the mega-cluster for semiconductors in the southern Gyeonggi region. The government on January 15 said that a total of 622 trillion won will be invested to build ″the world's largest chip cluster″ by 2042. [YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/05/29/e433af5e-5e55-4b7f-b0eb-47a7c7b4cd3c.jpg)
The construction site for a Wonsam chip production plant in Yongin, Gyeonggi, which is part of the mega-cluster for semiconductors in the southern Gyeonggi region. The government on January 15 said that a total of 622 trillion won will be invested to build ″the world's largest chip cluster″ by 2042. [YONHAP]
Such a commitment requires meticulous planning. Korea and Japan should jointly assess the project's costs and benefits and engage Washington with a unified strategy. A co-investment approach would increase bargaining power and reduce exposure to political volatility.
If used wisely, this partnership could become a powerful negotiating card in tariff talks with the United States. A successful outcome would not only help Korea reduce its trade surplus with America, but also ensure long-term energy security and technological collaboration. What now seems like a looming threat could turn into a strategic opportunity for Korea to protect its economic interests and expand its global influence.
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
with the Korea JoongAng Daily
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