The United States and Canada, longtime allies, have entered a full-blown trade war after tariff negotiations collapsed. In a national address on the 22nd, Canadian Prime Minister Mark Carney said his country would impose retaliatory tariffs on U.S. steel, dairy products and other goods starting the 8th of next month. The move responds to Washington's decision, effective at midnight that day, to levy 50% tariffs on about $20 billion worth of Canadian goods including wine, furniture and farm products. "When you're attacked, you're at war. We were attacked," Carney said, signaling a forceful response.
This breakdown in tariff talks is far from someone else's problem. The administration of Donald Trump, which has championed "America First," is treating even its allies as counterparts to be bargained with. As grounds for the latest tariff increases, Washington invoked even the Smoot-Hawley Tariff Act, which had lain dormant for more than 90 years. It included in the tariff list some products that even meet the requirements of the United States-Mexico-Canada Agreement (USMCA). Moreover, the Trump administration did not hesitate to make demands that could infringe on Canada's sovereignty, including over its culture and language, on top of the tariff rates.
Relations between South Korea and the United States have likewise been showing strains across trade, diplomacy and security. Washington is pressing Seoul to make large-scale investments in the United States and to dismantle various non-tariff barriers. The unusual return home last month of Kang Kyung-wha, South Korea's ambassador to the United States, is being read as a result of U.S. dissatisfaction over the Coupang controversy and issues surrounding the Network Act. In an unprecedented development, the Ulchi Freedom Shield (UFS) joint South Korea-U.S. exercise was cut by nearly half and ended early. Above all, there is deep concern that North Korea and the United States could enter direct dealings that trade a freeze of North Korea's nuclear program for eased sanctions, while shutting out South Korea.
Yet given the geopolitical risks on the Korean Peninsula, the harsh reality is that South Korea cannot confront Washington's excessive demands head-on the way Canada has. That calls for a more sophisticated security and trade strategy toward the United States. The government should quickly conclude its first U.S. investment negotiation and strengthen communication channels, so as not to give cause for friction to spread into trade and security disputes between the two countries. It should also make clear the principle of handling defense cost-sharing and exercise schedules separately from trade. Left unchecked, this could escalate into a compound crisis in which trade conflict and a security vacuum arrive at the same time.
