Trump Signals ‘America First’ Shift on Korean Trade

President Donald Trump signaled that the United States will be taking a new look at a five-year old free trade deal with South Korea, as the newly minted leader of that nation stood beside him Friday in Washington.

Trump welcomed South Korean President Moon Jae-in to the White House Thursday night, dined with him, and held a news conference with him Friday morning in the Rose Garden.

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But despite expressing great confidence in the U.S.-South Korean relationship, Trump made clear he wants to make the relationship more balanced on trade. Trump noted that since the U.S.-South Korean trade deal took effect — in 2012, under former President Barack Obama — the U.S. has run a consistent trade deficit with the East Asian country. That deficit totaled $27 billion in 2016.

In a joint appearance inside the White House, Trump said talks have already begun to tweak the arrangement.

“We are renegotiating a trade deal right now with South Korea, and hopefully it will be an equitable deal,” said Trump, according to pool reports. “It will be a fair deal for both parties. It’s been a rough deal for the U.S., but I think that it will be much different and will be good for both parties.”

The tough tone on trade had started the day before, when, according to Axios, Trump gathered his top Cabinet officials and talked about the potential of new trade tariffs to be placed upon steel and possibly aluminum.

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Trump has already taken action against Canada for its softwood lumber imports, which are partially subsidized by the Canadian government. But expanding tariffs to steel and aluminum would be a serious slap at China and possibly South Korea, too.

The steel tariffs could run as high as 20 percent and could hit all importers. They would not be unprecedented. President George W. Bush implemented steel tariffs in the mid-2000s. The tariffs helped bolster U.S. steel plants, but by 2006, steel consumers in the United States complained.

Trump has charged that nations, particularly China, “dump” cheap steel inside the United States to undercut their competitors. Often, the steel is subsidized by the government, or deliberately underpriced to undermine U.S. competitors.

Trump officials made sure to signal China at the day’s events with Moon. As a few journalists were allowed inside the White House to listen in on remarks between Trump and Moon, White House economic adviser Gary Cohn spoke up, prodding South Korea to “help” deter bad Chinese trade practices.

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“At some point we’d be interested to hear how you’re dealing with the Chinese policies and how you could help us in dealing with Chinese policies,” said Cohn, according to CNBC.

South Korea is China’s largest importer, and the Chinese have used that to pressure South Korea to call off a U.S.-South Korean missile defense system. Moon initially called the implementation off.

But in a consistent show of “America First” sentiments, Trump said he wanted South Korea to better offset the costs of the system, known as THAAD. THAAD will be set up to protect against North Korean aggression, which also was a hot topic at the joint meeting.