'Chance to overcome US tariff pressure exists in deals with Trump,' says US think tank

Experts say new agreements are always possible with Trump

By Ko Dong-hwan

Korea should keep seeking new deals with the Donald Trump administration to find new ways to make sure the country avoids the worst of the economic uncertainties caused by the U.S. president’s tariff measures, investment and business experts said Thursday during a forum hosted by Milken Institute, a nonprofit American think tank.

The forum, titled "South Korea at the Crossroads," also highlighted that Seoul’s advanced technological industries and global retail power are the country’s greatest assets in the current geopolitically challenging era, while noting that the resilience Korea has shown in overcoming past major economic crises can be expected again. This was the first time the institute held a forum in Korea.

The forum highlighted Korea’s difficult position due to Trump’s tariff measures, which will impose a 25 percent tariff on all imported automobiles and related parts starting April 3. This marks Korea’s third major export to be affected by the tariffs, following aluminum and steel.

John Quinn, executive chairman and founding partner of Quinn Emanuel Urquhart & Sullivan, a Los Angeles-based law firm, cited a Wall Street Journal report from last week, which stated that out of 173 countries facing trade risks due to the Trump administration, Korea ranked as the most vulnerable. According to Quinn, the report referenced Global Trade Alert, a Swiss-based research firm that tracks trade policy.

“The firm identified five red flags, such as [the] large trade surplus and the attention Trump officials pay to a country's trade practices. South Korea was the only one in the world to trigger all five red flags,” Quinn said.

“We haven't heard him say much about Korea yet but I think it's entirely predictable that this is coming. The current account deficit (for the U.S. in trades with Korea) was like $60 billion last year, which was 30 percent up over the year before. So there is going to be some tough conversations to be had.”

Timothy Reese, CEO and chief investment officer of the Pennsylvania Municipal Retirement System said Korea must adapt to the new trade environment to seek new opportunities.

“We only know that (Korea's investment) inputs will change, and with changing inputs, there will be changing outputs,” he said.

“The automobile industry just had the big tariff. This is going to be an opportunity for businesses to decide how they want to align their capital for long-term investment decisions. Does that include building more plants in the U.S.? Does that mean new different alliances to make up [for] any shortfalls? This is the opportunity to reshape your thinking. When you start going through change, you'll develop new muscles or find new strengths.”

Quinn said Trump is the first businessman to become U.S. president and described him as an artist when it comes to making a deal.

“With him, there will always be an opportunity to do a deal,” he said, mentioning how one of his clients and Trump have recently reached a deal to revoke an executive order the president had placed on the client.

“I certainly think he is somebody who can be worked with. Fortunately, you have some very visionary leadership, like Executive Chairman Chung Euisun at Hyundai Motor Group. We saw him in the White House just this week (pledging to invest $21 billion in the U.S.). And inbound investment, this is what this administration wants to see — buy America, invest in the U.S.”

The forum also highlighted Korea's advantage in global markets, noting the efforts of Korean companies across various sectors to maintain their global presence.

Kim Sang-hyun, CEO and vice chairman of Lotte Shopping, stated that because Korea is strong in global retail and is one of the world’s five largest e-commerce markets, there are opportunities worldwide.

“Korean companies have always been advancing forward, not just selling products but stimulating global consumers emotionally,” he said.

Lee Joon-pyo, CEO of SoftBank Ventures Asia, touted the technological advancements developed by Korean companies.

“I strongly believe Korea is an innovation powerhouse. Korean founders from the Korea Advanced Institute of Science and Technology spent over 10 years developing this new material called vanadium ion to build a nonflammable battery,” he said.

“This is the kind of company that surprises people outside Korea, especially investors in AI (artificial intelligence) cloud and data centers who are looking for innovative hardware technology. When they see such technology from Korea, they are surprised and ask, ‘Where did you find a team like this?’ Long story short, there are a lot of these hidden talents in this country.”