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2017-11-24 16:47
Protectionism backfires

The American administration is flexing its protectionist claws in earnest. The U.S. International Trade Commission Tuesday recommended a 50 percent tariff on large residential washers built by Samsung and LG and exceeding a quota of 1.2 million washers per year.

The recommendation came in response to a safeguard petition filed by U.S. maker Whirlpool. The petition will be sent to President Donald Trump next month, and he is expected to decide early next year.

Given his protectionist inclination, he will likely approve the measure. If so, it will be the first such action since 2002, when the George W. Bush administration slapped an 8 percent to 30 percent duty on imported steel.

The expected Trump move will make everybody unhappy _ except Whirlpool. The biggest victims will be American consumers, who will have to buy cheaper and better-performing Korean products at 50 percent higher prices.

The move will also undermine operations at two Korean-built washer plants scheduled to be operating by 2019. Samsung and LG are building factories in the U.S. states of South Carolina and Tennessee, respectively, each of which will hire hundreds of American workers.

To be hurt by the shortsighted protectionist move, in the long run, will be America’s global economic _ and political _ leadership. Trump withdrew from the Trans-Pacific Partnership, antagonizing the 11 other signatories and weakening U.S. influence over regional trade. China will gladly take America’s place.

The real estate tycoon-turned-politician has also demanded renegotiation of the bilateral free trade agreement with Korea, citing Seoul’s swelling trade surplus.

In the upcoming bargaining, Washington may also use the recent ITC move and Trump’s final decision to its advantage.

All this will come despite Seoul’s promise at a recent summit between Presidents Moon and Trump to buy military equipment worth several billions of dollars from the U.S.

The government can ill afford just to complain and admonish Washington. Both government and business officials should join forces to deal with the mounting U.S. protectionism, mobilizing both tough and moderate measures.

Korean trade diplomats should consider bringing the case to the World Trade Organization while conducting behind-the-scenes dialogue to minimize damage to the domestic industry.

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