Korea should prepare for stronger US protectionist trade policies: report

South Korean companies should keep a close eye on the protectionist trade policies in the US as President Donald Trump is expected to raise trade barriers there ahead of the November presidential election amid the worldwide spread of coronavirus, a local trade association said Tuesday.

The Korea International Trade Association’s new report said the coronavirus pandemic has emerged as an important variable in the Trump administration’s trade policy and the US presidential election.

“President Trump is expected to make all-out efforts to maintain his existing protectionist trade stance by highlighting security threats from China in conjunction with COVID-19,” the report said.

Also, this year’s “planned US trade talks are expected to be delayed one after another” in the aftermath of COVID-19. Trade negotiations with China, Japan, Britain, the EU and Kenya are expected to be delayed and talks on World Trade Organization reform are expected to be delayed, KITA said.

On March 18, the US raised its retaliatory tariff rate on aircraft from the European Union to 15 percent. Also, the US Congress and the industry have called on the administration to stop levying tariffs on steel and aluminum to ease international tensions. Still, the Trump administration has maintained existing tariffs, according to the report.

“(Korea) should pay attention to how President Trump will use the coronavirus crisis for his trade policy,” said Seol Song-yi, a researcher at KITA’s trade support center.

“Korean companies should keep a close eye on the impact of the COVID-19 outbreak and political variables in the US presidential election that can affect trade policies.” 

By Shin Ji-hye (shinjh@heraldcorp.com)