KOREAN AND JAPANESE RESPONSE TO TRUMP TARIFFS

KOREAN AND JAPANESE RESPONSE TO TRUMP TARIFFS

A 25% tariff went into effect this past weekend on imports of auto parts into the US market. On press perspective today, we touch upon the latest on trade talks between the US and its trade partners here in this part of the world. [Music] Hello and welcome to press perspective for this Thursday May 8th here in Saai Minani. Tackling US tariff remains a task here in South Korea as well as in neighboring Japan for more on the respective responses to the new trade reality sought by the Trump administration. I have Rui Valdez with Spanish news agency EF Spain here in the studio. Ruy, welcome back. Nice to be here. I also have Koi Yonimura, the deputy foreign news editor for Japanese daily Koi, it’s great to have you back. Thank you for having me. Right, we will start here in the studio. Rui, let’s begin with a quick rundown of the US tariffs currently in place. Yeah, Trump tariff revival has shaped markets from Brussels to Beijing all over the place. Uh just in general ter terms as we know uh since Donald Trump returned to the white house he reinstated these tariffs as a central tool for political and economical leverage. So I will go for with a long list but it’s not really the full list of all the tariffs that has been implemented but just the the most relevant ones. H imposed country specific tariffs to China which is uh 145% on toys, machinery and others. H Mexico and Canada were also imposed with a tar with a 25% tariffs but with important exemptions because they have they respected in a way the free trade agreement that they have in North America. uh European Union is facing a threat of 200% tariffs on alcoholic beverage and uh Venezuela is subject to an indirect tariffs uh from goods that are produced with its oil and on the other hand we had sector specific tariffs automobile and parts they were imposed into different dates in the beginning of April and the beginning of May for 25% steel and aluminium and there’s two new ones that apparently will come in the future or there’s a possibility which which is pharmaceuticals and uh one that reach all over the media which was foreign films. Apparently they won’t apply foreign films but I want to stop a little bit with this example because it it kind of shows what I believe is a misunderstanding on how supply chains are so diversified internationally. So you it could sound like okay let’s preserve uh American movies American movie industry right but American movie industry relies on so many assets that are come from other countries so it’s not that simple and this applies to basically all the most of the goods that Trump is trying to impose tariffs so if you move one little piece then you have to move another 100 pieces and of course well we have the famous reciprocal tariffs that were paused in many countries until July 8th. These countries have the negotiating countries have to come up with a package by that date and try to get exemptions, reductions or a better deal than the ones that were imposed. Of course, this has created rising inflation, increasing uncertainty and volatility in the markets. Right. Go with regard to the tariffs, the US tariffs on auto parts which went into effect this past weekend. How do these particular tariffs look to affect Japanese car makers? Well, as um everyone knows, the automotive industry uh including cars and car parts plays a major uh role in the Japanese economy. Japan exports around 140 billion US dollars in vehicles and parts each year and about 30% of that roughly 50 billion US dollars is uh exported to the United States. So um as you mentioned uh early April first the the US government imposed a 25% tariff on finished vehicles. Then couple days ago then on May 3rd a 25% tariff was also placed on auto parts uh like uh engines and transmissions and these tariffs have had a serious impact. Uh on May third uh Japan’s minister for economic and fiscal policy met the press and Mr. Kazawa met a press and stated that one Japanese oat maker is losing $1 million US every hour due to the new tariff. So uh media reports some media reports that say say that um major companies like Toyota and Honda may face losses of several billion dollar for this tariff. In fact, Toyota announced today that it expects its operating profits for the uh fiscal year ending next March to fall by 35% compared to this March. So that would be a decrease of around 7 billion US. So it affect much right. Andrew, what can you tell us about the impact of US tariffs on autos and their parts for South Korean car makers? Yes. Uh as in Japan, this 25% tariffs is striking at the heart of Korea’s exports. Erh this is not only a tariff that will affect directly on cars as we as we mentioned h it’s a sector w it has a sectorwide effect right some calculation says that the automotive industry could shrink by 7% and the tariffs apply even to vehicles assembled in third countries like Mexico as as we have talked in other programs Korean and Japanese industries erh how do you say they bet on nearshoring since long time ago and even though uh well Trump would say they took advantage of the free trade agreement that they had in North America to reduce the cost on exports of automotive exports but right now if they don’t meet certain criteria they will still be subject to tariffs even though if they are manufactured in third countries so this is a big effect not only to Korean but also to the countries that are housing these factories. There’s limited room to maneuver because it sounds easy. How can you h respond? Right? You can absorb cost or redirect exports but global demand is weak. If a country as big as big and as rich as US is your main client, it doesn’t mean that you’re going to find uh such a good client in other parts of the world. also shifting production to the US as some South Korean companies are already doing like Hyundai. Er, it requires also as we mentioned that you bring some of the part makers also because as we mentioned if these auto parts were coming from other countries and they don’t meet certain criteria, it means that there will still be very expensive. So, so it’s just not that simple to adapt. H there was this important trade talk between the the ministers of commerce industry and chief negotiators of South Korea and the US and as we mentioned they are preparing this package because South Korea doesn’t only want recipro reciprocal tariffs to to be exempted they want also sectoral tariffs as as we just mentioned let’s say they want the whole pie because if they don’t include the automotive industry and the parts it’s still going to represent sent a big hit, probably is the biggest hit to Korea among other sectors. Right. And Ruth, despite those concerns, there are some pundits who believe that US tariffs on on imports of auto parts may ultimately benefit South Korean businesses. Could you tell us a bit more about these views? Yes, this is an interesting point. What this expert says that what could happen is that since China right now is subject to such a massive amount of tariffs, it means that the sorry the US um automotive companies they used to import auto parts from China, right? So now China has is subject to these massive tariffs. So they will need to find new clients to reduce cost and South Korea would be in the top places or the top potential clients to get h these parts. So this way by this triangulation is that South Korea might get benefit. Again this is an appre a theoretical appreciation but still we need to really measure the whole cost of of these maneuvers. But yeah, there is promise that somehow as an unintended consequence, South Korea autoarm makers will get benefits because they will fill the gap that China will leave with this increase of its cost. Right. I see. Kochi, Japanese trade officials have been holding tariff talks with their US counterparts. What’s the latest regarding these talks? Kuichi? Um uh same as South Korea, uh Japanese government is calling for a comprehensive uh review or removal of all tariffs uh including including those on automobiles and parts. And however uh during the second round of negotiations held on May 1st uh it is reported that the US side made it clear that the 25% tariffs on automobiles parts steel and aluminium are not even up for discussion. So this puts Japan in a very difficult position. um intensive talks are scheduled to begin in midMay uh with the goal of reaching a conclusion sometime by the end of this month or early next month. But uh still many experts including my colleague in my newspaper a colleague in my newspaper believe it will be really hard for Japan to achieve any roll back on car related tariffs. Right. I see. And amid the threat of US tariffs on friends and foes alike, I understand a bipartisan delegation called Japan China Friendship recently wrapped up a visit to Beijing. Could you tell us a bit about this Japanese initiative and its implications? Um, at the end of a April, as you mentioned, bipartisan group of Japanese lawmakers led by uh LDP Secretary General Moryama visited China. uh they hold held talks with Mr. Jaolo Ji the third ranking official in China’s Communist Party and chairman of the National People’s Congress standing committee. Uh since the Japan China summit in Peru last November uh between Prime Minister Ishba and Chairman Shijinim uh political exchange between the two countries have been increasing especially after the Trump administration began. uh US China tensions have been growing as you know and uh in response China is working to improve ties with neighboring countries like Japan, South Korea and Southeast Asia and for Japan uh it is also Japan also sees clear value in keeping communications open with China. Uh however, of course, this does not mean that Japan is teaming up with China to confront the US over tariffs. Uh while US tariffs are certainly a big big problem, uh China is also not as as fair uh trading partner as it claimed to be. For example, uh we all remember that what happened when South Korea uh positioned the third missile defense system system in South Korea and what happened after that. And uh Japan is also now right now urging China to lift its bonds on imports of Japanese seafood and agricultural products. So during the recent visit to China uh the US uh US tariffs were of course discussed between Japan and China Japanese delegation but but the Japanese delegation also asked China that uh uh act as a responsible major economic power. Right. I see. Meanwhile, Ry, with regard to South Korea, an opinion piece published by US magazine, the national interest, claims Hell has been steadily shifting its trade strategy ever since the first Trump administration. Do you tell us more about this particular observation? Yeah, this observation is quite interesting because it means that since Trump since the first administration, he already gave many signals of what kind of policies he wanted in terms of tariffs or trade, right? So thanks to that South Korea in a way start preparing or noticed that it depended a lot on China and US trade. So to start making some kind of like a plan B they start signing many uh free trade agreements or start negotiations promising negotiation negotiations to to get free trade agreements as a way to protect itself. Now we have Trump coming back to the White House and what this article points out is that South Korea might be a little bit more ready than the first time. So it it points out that from 2018 to 2025, Soul initiated 17 new trade negotiations following only 32 between 1999 and 2017 which is a major increase and there is ongoing negotiations with many countries like Bangladesh, Mexico, Egypt, Morocco and growing reach to other places like Serbia, Pakistan, Tanzania etc. Erh nearly 80% of Korean economy relies on trade. So US accounts 30 13 to 14% of that and also China is a big chunk. This means that by trying to diversify or or trying to depend less to get intermediate goods and diversify export destination. South Korea in a way is protecting its economy. The only thing is remains to be seen how good this strategy would work because if we see the present present reactions that South South Korea has had to trump tariffs, it has been kind of um like favoring US demands in a way. It’s one of the countries that of course it because it depends more on on US uh trade. it it has invested more now or given in to Trump’s demands. So we still don’t know if this plan is actually working but we could say that it has a good reserve in in in the case that for example the ongoing tariff negotiation for reciprocal tariff fails right ka concerns over Trump’s tariffs they extend beyond South Korea and Japan and as proof of this reality regional finance authorities spoke against protectionism this past Sunday I believe over in Italy how relevant do you suppose is this regional statement Yes. Um as you mentioned on May 4th uh finance ministers and central central bank governors uh from Japan, South Korea, China and uh Asan uh nations gathered in Milan, Italy and they released a joint statement saying that the the escalating protectionism is a burden on global trade and can lead to economic fragmentation. uh this was an indirect because they didn’t mention the name of the United States of America or Trump administration but still strong criticism of the Trump Trump administration’s tariff tariff policies and uh I think it is quite unusual for Japan and South Korea to criticize the the U US uh together with China. uh while this statement may not have a real power to change US policy but it really reflects the growing frustration among key economic players uh among Asia over the US trade stance. Right. Ru speaking as a foreign journalist who’s observing the efforts here in East Asia to better engage the US in tariff talks. Do South Korea and Japan appear to be strategic allies or perhaps silent rivals? Well, you could say they have a little bit of both under these circumstances as US tries have squeezed these two the two largest democracies in East Asia. Japan and South Korea have been adopting parallel yet subly competitive approaches to defend national interest. H while both nations coordinate with Washington and have like a similar enemy in in this context and try to diversify trade ties, they still have main rivalries in tech trade leadership and uh we could say that US we us um attitude is testing these both countries beneath diplomatic smiles. erh the strategic cooperation well as I mentioned this common enemy they have they both are facing as uh Mr. She said 25% US tariffs in exports like auto, electronics and steel. H they are both vote of course aiming as a respond with a diplomatic push actively negotiation negotiating for these exemptions and especially in the sectors that affect them the most like h high-tech or electronic vehicles and they are both expanding regional ties with a Assean and Pacific economies to hedge against US market volatility. Japanese also seem to be trying to diversify to um to strengthen their position in in this context of of tariffs. Erh at the same time as I mentioned there is this silent rivalry to fight against uh to fight for tech supremacy. Uh Korea leads for example in batteries for electronic vehicles but Japan in semiconductors. Erh trade leadership also both seek a louder voice regionally in either Southeast Asia or in the Pacific even including with investment or approaches into Latin America. H and the question is who’s Washington favorite? Uh some pundits would say that soul has uh right now a better relationship in terms of uh their military exchanges and cheap semiconductor diplomacy but also Tokyo has a strong stance h because of his auto sector in the US. Um so yeah the broader implications of this that these two countries are facing of course is a reduction almost of 1% of their GDP according to some calculation and you could say that they have right now a dual uh strategy that uh combines both competition and cooperation right competition and cooperation koi broadly speaking what areas do you suppose can soland Tokyo work as strategic allies then Um well um actually I just totally agree with what Mr. really says we are some part in some part we are teammate and some part we are rival right and geopolitically both Japan and South Korea are caught between the US and China and right now uh both the US and China are becoming less predictable and I can say less trustworthy in terms of economic policy and Japan so in that sense Japan South Korea share many interest and uh uh requires better communication uh between us is becoming more and more important and uh of course as Mr. really said we are uh both major manufacturing and trading countries. So there is also competition between us. Uh in that sense Japan and South Korea are both rivals and partners. But also well uh I noticed that the the recently the US uh United States of America has asked as asked Japan and South Korea to work together in the ship building sector. Right. And it is very important for both Japan and South Korea that US Navy maintains stays strong and maintains strong control over sea lanes from the Indian Ocean to the East China Sea. So in this area uh there is a larger room for cooperation between Japan, South Korea. we can help US Navy together with uh both of us. All right. For sure. So on the security and perhaps defense front, South Korea and Japan can work together as partners then. All right, Ko, as always, thank you so much for your time and your thoughts today. Thank you, Andrew. Thank you very much for your insights. My pleasure. Right. Well, that brings us to the end of this edition of Press Perspective. We return same time tomorrow with a session on diverse foreign coverage of Korea related news. Join us then.

트럼프발 관세, 각국 협상

Hello and welcome to Press Perspective for this Thursday May 8th here in Seoul.
I’m Min Sun-hee.
Tackling U.S. tariffs remains a task here in South Korea as well as in neighboring Japan.
For more on the respective responses to the new trade reality sought by the Trump administration I have Ruy Valdes with Spanish news agency EFE Spain.
Ruy welcome back.
I also have Koichi Yonemura the Deputy Foreign News Editor for Japanese daily The Mainichi.
Koichi thank you for being us.

1) Ruy, let’s begin with a quick rundown of the U.S. tariffs currently in place.

2) Koichi, how do these latest tariffs on auto parts look to affect Japanese carmakers?

3) And Ruy, what can you tell us about the impact of U.S. tariffs on autos and their parts on South Korean carmakers?

4) Ruy, some pundits believe Trump’s 25-percent tariff on imports of auto parts may ultimately benefit South Korean businesses.
Do tell us more about their views.

5) Koichi, Japanese trade officials have been holding tariff talks their U.S. counterparts.
What’s the latest regarding these talks?

6) Koichi, amid the threat of U.S. tariffs on friends and foes alike, I understand a bipartisan delegation called “Japan-China Friendship” recently wrapped up a visit to Beijing.
Do tell us a bit about this Japanese initiative and its implications.

7) Meanwhile Ruy, with regard to South Korea, an opinion piece in The National Interest claims Seoul has been steadily shifting its trade strategy ever since the first Trump administration.
Do tell us more about this observation.

8) Koichi, concerns over Trump’s tariffs extend beyond South Korea and Japan, and as proof of this reality, regional finance authorities spoke against protectionism this past Sunday over in Italy.
How relevant is this regional statement?

9) Ruy, speaking as a foreign journalist who is observing the efforts here in East Asia to better engage the U.S. in tariff talks, do South Korea and Japan appear to be “strategic allies or silent rivals”?

10) And Koichi, broadly speaking, in what areas can Seoul and Tokyo work as strategic allies?

All right.

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2025-05-08, 17:30 (KST)