US President Donald Trump’s remarks Monday to push for a “reciprocal tax” on Korea has been met with a chilly reaction from lawmakers and trade experts here, with criticism of it being a “nonexisting” concept that takes another step toward trade protectionism and may violate international trade norms.
At a White House event on infrastructure Monday, Trump said his administration plans to soon unveil a “reciprocal tax” to charge countries that take advantage of the US. He specifically named Korea, Japan and China.
US President Donald Trump (AP)
Although the White House did not elaborate on what a “reciprocal tax” would pose, media described it as retaliatory tariffs.
It is expected to pose a measure that adds import taxes to products from countries at the same amount of taxes placed on US products exported there.
The Korean government did not make an official comment on Trump‘s comments, but said it would keep a cautious eye on the move.
“Now, we do not know what the US thinks and on what rationale he made such a remark, because ‘reciprocal tax’ is a new concept and there are no details how such a tax would be structured,” said Chang Sung-kil, chief of the Ministry of Trade Industry and Energy’s US trade division.
But, he added the government will take action accordingly when the details come out.
Trump’s frequent but seemingly imprudent words on protectionism have similarly invoked negative reactions from industry watchers here.
“The phrase, ‘reciprocal tax’ itself does not exist. It is nonsense in the way Trump said he would build a wall along the border with Mexico -- which he hasn‘t. He is losing trust by pouring out such rash words,” said Je Hyung-jeong, a researcher at the Korea International Trade Association.
“If the US unveils the details -- although no one knows what it is now -- and if it violates the rules of the World Trade Organization, Korea can complain to the WTO together with China and Japan,” she added.
Rep. Park Young-sun of the ruling Democratic Party of Korea also criticized the latest remarks. “Trump is looking at only one side and not the others. He is running a nation like he runs a private company, pursing profits in sight,” Park said via Twitter on Tuesday.
Trump’s push for protectionism policies against Korea is nothing new. Last month, he decided to slap tariffs on imported washing machines and solar panels produced by Korean manufacturers. He decided to ignore the US International Trade Commission’s recommendation that washers produced in a nation that had signed a free trade agreement with the US be excluded from safeguard measures.
The Korean government immediately lodged a complaint with the World Trade Organization, expressing confidence the sanctions will prove invalid.
The two nations are now renegotiating to revise the free trade agreement that took effect in 2012 after the Trump administration called for the revision of the bilateral trade agreement last year on the ground of trade imbalance.
According to the report released by the US Ministry of Commerce, the US posted a trade deficit of around $23 billion with Korea last year, by exporting products worth $48.2 billion and importing goods worth $71.1 billion.
By Shin Ji-hye (email@example.com)