South Korea and the End of US Credibility
Since announcing import tariffs on steel and aluminum, Donald Trump has been able to force US allies such as South Korea to change the terms of settled trade agreements. But while US trade partners may accept offers they can't refuse, many countries will no longer trust the US to negotiate in good faith.
WASHINGTON, DC – The US-South Korea alliance has been one of the most dramatic geopolitical success stories of the post-war years. But US President Donald Trump now seems determined to do away with the economic and strategic benefits of that longstanding relationship.
In the 1950s, a war-ravaged South Korea had Asia’s third-lowest per capita income, highest inflation, and slowest rate of growth. But the authorities implemented far-reaching reforms in the early 1960s, and, over the next three decades, it became an industrial powerhouse with a standard of living that qualified it for membership in the OECD, the club of rich countries. Much of this success was due to a shift from foreign-aid dependency to export-led growth.
In the mid-2000s, South Korea and the United States began exploring closer trade ties, and in March 2012, the Korean-United States Free Trade Agreement entered into force. By most measures, the KORUS has been a success. Yet, after taking office, Trump denounced it as a “horrible deal,” and insisted that it be renegotiated.