Hard-Line Conservatism Becoming Normal US Strategy; Shows Growing Importance of Economic Diplomacy

Donald Trump’s cabinet will be filled with conservative hard-liners. On Jan. 3, President-elect Trump nominated hard-liner Robert Lighthizer, former deputy United States trade representative, as the U.S. trade representative. He even explained that Lighthizer will “do an amazing job helping turn around the failed trade policies which have robbed so many Americans of prosperity.” With this nomination, normal U.S. strategy has been to establish a protectionist troika, made up of Peter Navarro (the White House National Trade Council nominee), Wilber Ross (commerce secretary nominee), and Lighthizer. Thus, it can be said that the future cabinet’s tone of “America First” has become clearer.

Those who were in charge of U.S. trade policy during the Reagan administration when the use of “Super 301” was rampant have now grabbed the ball, and it is obvious that the shadows of U.S.-China trade conflict will darken.* It may even become reality that Trump will label China as a currency manipulator and impose retaliatory tariffs of 45 percent on Chinese imports such as steel. Other countries will not be any safer. Ford already scrapped its plans to build a car factory in Mexico and will invest in Michigan instead due to pressure from Trump. It seems that efforts to undermine the North American Free Trade Agreement have already begun. The fact that the U.S.-Korea Free Trade Agreement has been identified as an example of how U.S. jobs are being stolen makes us worry about whether we will be negatively affected.

If a trade war develops between the U.S. and China, and changes are made to the U.S.-Korea FTA, it is obvious that there will be immediate consequences for our export. We desperately need to come up with measures to counter this situation. The Ministry of Foreign Affairs has announced that it will reinforce economic diplomacy to prepare for the possibility of protectionism. The bottom line is that U.S.-Korean senior economic cooperation will be strengthened and that cooperation between the Ministry of Foreign Affairs and its diplomatic missions and corporations will be reinforced in order to prepare for global import restrictions. However, this may have limited effect in countering the massive protectionist measures from abroad. Thus, these measures will have to be accompanied by the close collaboration of the economic, diplomatic, and security sectors. It may also be time to diversify the export line that has been mainly focused on the U.S. and China, and change the development of new main export products that have not changed for more than a decade.

*Editor’s note: The phrase “Super 301” refers to Section 301, a lapsed provision of U.S. trade law, first passed by Congress for two years in 1988 to spur the administration into tougher action against other countries’ allegedly unfair trading practices. The law was subsequently amended and codified in the U.S. Code of Regulations.