[Editorial] Show all ability

Australia has won a reprieve from the US’ global steel and aluminum tariffs after Canada and Mexico were granted temporary exemptions to them.

South Korea must demonstrate its ability to secure an exemption from the tariffs by March 23 when they will be enforced.

With both positive and negative signs mixed for the present, it is hard to see which way the wind is blowing. Trump signed an order imposing 25 percent tariffs on steel and 10 percent on aluminum on March 8. The legal basis of the order is Section 232 of the US Trade Expansion Act which allows Washington to set up big trade barriers for national security.

That is why Australia, a traditional US ally, has been spared the tariffs. Its exemption is a ground for optimism that likewise, South Korea as a Washington ally will likely be included in the list of countries exempted from the tariffs.

But the atmosphere in the US Commerce Department is said to be unfavorable. South Korea was the third-largest steel exporter to the US last year. Its export volume is large.

South Korea’s “transshipment” of Chinese steel products to the US is reportedly cited as a barrier in winning an exemption. Korean steelmakers import Chinese products to reprocess and re-export to the US. Trump has repeatedly singled out China for unfair trade that he aimed to curb with the tariffs.The government has emphasized that the transshipment accounts for only 2.4 percent of South Korea’s steel exports to the US and that South Korea’s import of Chinese steel products for transshipment decreased 21 percent last year from a year earlier.

Still, Washington does not buy the argument.

Time is short for the government to try to persuade the US. Negotiations for a reprieve from tariffs must be completed in less than two weeks.

Furthermore, it does not appear easy to find a solution that can turn the tables in South Korea’s favor without damaging its steel industry.

For the moment, the domestic steel industry pins hope on the government seeking to contact the Trump administration for negotiations over the tariffs. In the long term, it needs to push for further market diversification and consider relocating their mills to the US as a way to skirt the tariffs.

Though losses appear inevitable, steel mills had better brace for a situation that they cannot but curtail exports to the US, including their transshipment of Chinese products, to be spared the tariffs.

It looks difficult to turn the situation around without making drastic overtures over steel exports to the US. Merely emphasizing the small proportion of transshipment of Chinese products is not enough to persuade the Trump administration. It is questionable if stressing a military alliance will be enough to make Trump change his mind. Washington invoked Section 232 for national security, on the surface, but the point is its trade deficit and job creations in America. Seoul needs to consider making conciliatory overtures focused on this point.

The retaliatory tariffs on steel and aluminum are to some extent attributable to Trump’s political calculations related to the mid-term elections and his protectionist view of international trade. Be that as it may, the government should not be negligent in responding to the tariffs.

The situation might be less tough if the government exerted its trade diplomacy proactively before Section 232 was invoked.

Though the Korean economy can hardly grow without increasing exports, it is in for a difficult situation where it cannot but consider cutting down exports to the US to appease it to spare South Korea from the tariffs.

All it has to do now is to concentrate on persuading the US. It may well find ways to join other steel exporters such as the European Union and Japan to overcome the trade barriers.

It must show all its ability.

With the Trump administration expected to keep pushing trade protectionism, the government must beef up its trade diplomacy in the long term. The industry must diversify export markets further and differentiate products through technology innovations.