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Editorial: U.S. “deal-making” trade diplomacy disturbing

The Trump administration’s assertive trade policy is sending shock waves throughout the world. In retaliation for the additional tariffs slapped on Chinese steel and aluminum products in mid-March, the Chinese government has implemented additional tariffs of up to 25% on 128 U.S. products, including pork and wine.


On top of the additional tariffs, the U.S. is expected to announce shortly the targets of sanctions for violation of intellectual property rights. While China may invoke further retaliatory measures, the two countries are reportedly also engaged in behind-the-scenes negotiations on voluntary export restraint.


South Korea’s position is in sharp contrast to China’s. South Korea has been exempted from additional steel and aluminum tariffs along with the EU, Mexico, Canada, and others. It is said that this is because it was engaged in negotiations to review its free trade agreement (FTA) with the U.S.


The ROK is reported to have made concessions, such as expanding imports of cars meeting U.S. safety standards and banning currency manipulation for a weaker won, and reached a general agreement with the U.S. However, President Donald Trump subsequently said that the U.S.-ROK FTA might be kept “on hold” on account of the North Korea issues. The ROK appears to be at the mercy of Trump diplomacy.


The Trump administration is unusual, even in comparison with past U.S. administrations, in that its trade policy is without principles and focuses only on bilateral “deal-making” diplomacy.


It makes unprincipled deals through threats of punitive tariffs and other measures, drawing the other country to the negotiating table, and attempting to win concessions that can be presented as “achievements” in domestic elections, not hesitating to take government-managed trade measures.


If there are indeed trade issues as the U.S. claims, these should be sorted out through the dispute settlement mechanism under the multinational WTO framework. The current Trump-style diplomacy may distort international trade rules and trigger a senseless trade war. This will also have a negative impact on the financial markets and business confidence, which will ultimately not be in the U.S.’s interest.


Japan is being slapped with additional tariffs on steel and aluminum products for security reasons despite its being a close ally of the U.S. It should uphold multilateral trade rules and work for a solution by filing a case with the WTO on the U.S.’s questionable actions.


President Trump may propose a solution through bilateral negotiations at the Japan-U.S. summit later this month. Prime Minister Shinzo Abe should strongly argue for the importance of free trade based on multilateral cooperation.

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