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(EDITORIAL from Korea Times on March 12)

2018/03/12 07:00

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Fight on steel tariffs

Korea should take radical action against protectionism

South Korean steelmakers are feared to bear the brunt of growing U.S. trade protectionism. President Donald Trump signed an executive order Friday to impose 25 percent tariffs on imported steel and 10 percent on aluminum imports.

The order is set to take effect 15 days after the signing. It is aimed at protecting U.S. steel and aluminum producers and workers in the name of national security. But the imposition of tariffs has raised the specter of a trade war.

The European Union, China and Japan have denounced President Trump's unilateral action. Some countries have even threatened to retaliate against the protectionist move. If such a threat becomes a reality, no one can rule out the possibility of a trade war.

It is not too much to say that no other country would suffer more from U.S. tariffs than South Korea, which is too dependent on exports for economic growth.

Korea is the third-largest steel supplier for the U.S. Its exports of steel products to America amounted to $4 billion last year. But the sum is likely to dive 22 percent to $3.1 billion this year affected by the tariffs, according to Hyundai Research Institute. The tariffs will also cost 14,400 jobs here.

One may say the feared damage is not that serious, taking into account the country's gross domestic product (GDP) of 1,500 trillion won ($1.4 trillion). But the bigger problem is the U.S. protectionist move is not confined to steel and aluminum.

Washington has already slapped anti-dumping and countervailing duties on Korean steel products. It has recently imposed high safeguard tariffs on Korean-made washing machines and solar cells and modules. The next U.S. target might be cars or semiconductors.

The Moon Jae-in government vows to persuade the Trump administration to give an exemption to Korea as it did to Canada, Mexico and Australia. It plans to emphasize the importance of Korea's status as a treaty ally of the U.S.

The government will also call on Washington to take into account the ongoing negotiations for the revision of the Korea-U.S. Free Trade Agreement as well as talks on cost-sharing for the U.S. military presence.

The country will consider filing a complaint with the World Trade Organization (WTO) if the U.S. presses ahead with the steel tariffs. However, this step does not appear to be good enough to cope with the wave of protectionism. It is time to work out more radical measures to defend the interests of domestic industries and workers.

(END)

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