Haste makes waste? Lee urged to resist US tariff threats

A sign reading "Cluck Cluck TACO" is displayed outside the White House in Washington, June 17, after U.S. President Donald Trump cut his G7 trip short and returned to the U.S. capital. Reuters-Yonhap

Calls are mounting for Seoul to refrain from signing a tariff deal hastily with Washington, as the leaders of Japan and other U.S. trade partners criticized U.S. President Donald Trump’s letters threatening “reciprocal” tariffs he said will take effect on Aug. 1.

Amid the limited impact of the U.S. tariff threats on the stock market, speculation is also growing that the Lee Jae Myung administration will maintain a cautious approach — though it has ostensibly vowed to accelerate trade negotiations.

After receiving Trump's letter Tuesday, Lee remained silent on the issue during public events. The presidential office also said Kim Yong-beom, presidential chief of staff for policy, prioritized the national interest over immediate negotiations during an emergency meeting with relevant ministry officials that day.

The president’s stance was somewhat softer compared to the leaders of Japan, South Africa and Brazil. Japanese Prime Minister Shigeru Ishiba called the U.S. moves “truly regrettable,” while South African President Cyril Ramaphosa said the 30 percent reciprocal tariff is based on an inaccurate trade view. Brazilian President Luiz Inácio Lula da Silva also criticized Trump, saying, “We don’t want an emperor.”

Korea, however, expressed its displeasure indirectly through the ruling Democratic Party of Korea’s (DPK) denouncement of the letter as a breach of trust by an ally.

“An alliance is only meaningful when it is based on mutual respect,” DPK spokesman Kim Ji-ho wrote on social media. “Unilateral notifications and the imposition of tariffs without prior consultation can never be justified.”

Rep. Yoon Jong-o, floor leader of the progressive minor opposition Jinbo Party, criticizes U.S. President Donald Trump's unilateral notification of a 25 percent tariff rate during a press conference at the National Assembly in Seoul, Tuesday. Courtesy of Jinbo Party

Rep. Yoon Jong-o, the floor leader of the progressive minor opposition Jinbo Party, urged the government to stick to the principle of reciprocity.

“The reason why Trump is calling for tariff deals with a fixed deadline is that the U.S. itself is in greater urgency,” he told the press Tuesday. “If Korea concedes to the U.S. to get tariff reductions by the Aug. 1 deadline, it will not be able to protect its national interests.”

Rep. Kim Joon-hyung of the minor opposition Rebuilding Korea Party, a former chancellor of the Korea National Diplomatic Academy, said in a radio interview Wednesday that Korea should be in solidarity with Japan to reject unilateral requests from the U.S.

Myongji University professor Kim Tae-hwang advised Korea to align with Japan and the European Union, both of which are key trade partners of the U.S.

These suggestions were backed by Trump’s inconsistency in the tariff deadline, which has been ridiculed with the term “TACO,” which stands for “Trump always chickens out.” According to Forbes, the U.S. president has flip-flopped 28 times regarding his tariff policy.

The market has also not been swayed by Trump’s tariff threats.

On Tuesday, the benchmark KOSPI jumped to 3,108.49 points from 3,066.03 in the morning, eventually closing at 3,114.95, up 1.81 percent from the previous day.

“An adjustment caused by tariff threats is a chance to have a bite of ‘taco,’” Daishin Securities analyst Park Hyun-jeong said. “It is an opportunity to increase the proportion of risk assets in the medium to long run.”

Overseas experts remained skeptical about the progress of trade talks between Korea and the U.S.

“Almost all of Korea’s tariffs are at zero for U.S. imports, leaving them with less to offer the U.S. than India or Vietnam with high tariffs,” Wendy Cutler, vice president of the Asia Society Policy Institute and former negotiator of the Korea-U.S. Free Trade Agreement, said in her commentary.

Jeremy Chan, a senior analyst at Eurasia Group who had anticipated that Lee would not want to sign a bad deal early and look foolish later, said Korea’s current trade minister has signaled a harder-line stance by mentioning “mutually beneficial outcomes,” suggesting that Korea wants something in return.