The Korean Economic Association announced on the 26th that it held a conference with the Peterson Institute for International Economics (PIIE) at the FKI Tower Conference Center in Yeouido, Yeongdeungpo-gu, Seoul, with the theme of ’The turbulent second term of Trump and Korea’s survival solution.’
PIIE Director Adam Posen, who gave a keynote speech that day, emphasized that it is necessary to distinguish whether U.S. President-elect Donald Trump’s promises are mere threats or whether they will actually be implemented. While it was predicted that the hardline immigration policy would be implemented immediately after taking office, the tariff policy was mainly aimed at China and Mexico and was likely to be used as a tool for negotiations with other countries.
Regarding the Korean economy, Director Posen said, “Basically, the economic growth of the United States will be a positive factor for the Korean economy,” and “In the Trump 2.0 era, Korea will expand direct investment with the United States and strengthen economic cooperation, creating ‘Fortress America.’ ), he argued, “a strategy to get inside is needed.” At the same time, he advised that diversification into markets other than the US and China is necessary.
PIIE Senior Research Fellow Jeffrey Short, who spoke at the session, said, “The U.S. tariff policy will not distinguish between allies and enemies,” and said that Korea and the U.S. will support each other in areas where the interests of both countries are aligned, such as automobiles, semiconductors, defense industry, and shipbuilding. He advised that it would be helpful to suggest industrial cooperation items that can be a ‘win-win’.
Reporter Kwak Do-young [email protected]
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What are the key economic strategies South Korea can employ to navigate geopolitical tensions during Trump’s second term?
Interviewer: Welcome to Time.news, Adam Posen, Director of the Peterson Institute for International Economics. It’s a pleasure to have you here after your keynote speech at the recent conference in Seoul.
Adam Posen: Thank you for having me! It’s great to be here to share insights on such an important topic.
Interviewer: The conference focused on the theme “The turbulent second term of Trump and Korea’s survival solution.” Given the current geopolitical landscape, what do you see as the primary threats and opportunities for South Korea in this context?
Adam Posen: That’s a great question. Right now, South Korea faces a mixed bag. On one hand, there are threats from potential hardline policies from the U.S., particularly those stemming from President-elect Trump’s promises. It’s essential for Korea to differentiate between bluster and actual policy implementation. For instance, his immigration and tariff policies will likely have significant impacts on Korea.
Interviewer: You mentioned the economic growth of the United States in your speech as a positive factor for the Korean economy. Can you elaborate on how South Korea should position itself to benefit from this growth?
Adam Posen: Absolutely. The U.S. growth can indeed be advantageous for Korea, especially if we see a “Trump 2.0” era that emphasizes direct investments and strengthened economic ties. My suggestion would be for Korea to pursue a strategy of “Fortress America,” which is about deepening cooperation with the U.S. while also navigating its complexities. This means actively participating in areas of shared interest, particularly in sectors like technology and defense.
Interviewer: You also mentioned the importance of market diversification. What specific strategies would you recommend for South Korea in this regard?
Adam Posen: Diversification is crucial. South Korea should look beyond China and the U.S. to expand its footprint in emerging markets. This will help mitigate risks associated with over-reliance on these two economies. Additionally, the focus should be on enhancing cooperation in sectors where both South Korea and its partners can benefit mutually, such as automobiles, semiconductors, and shipbuilding.
Interviewer: Jeffrey Short highlighted that the U.S. tariff policies may not differentiate between allies and enemies. How should South Korea navigate this potential challenge?
Adam Posen: That is certainly a valid concern. South Korea should proactively develop industrial cooperation that emphasizes “win-win” scenarios, aligning its interests with those of the U.S. A collaborative approach in key sectors, while also negotiating terms that protect its own economic interests, will be essential. The goal is to articulate a clear plan that showcases how cooperation can be beneficial for both parties.
Interviewer: considering the uncertainties surrounding U.S. foreign policy and economics, what advice would you give to policymakers in South Korea?
Adam Posen: Stay adaptable and proactive. South Korea should engage in ongoing dialog with U.S. counterparts to anticipate shifts in policy and align strategies accordingly. Building strategic partnerships beyond just these two major economies will also provide a safety net. In this unpredictable environment, agility and foresight will be invaluable.
Interviewer: Thank you, Adam, for sharing your insights. It’s been a fascinating discussion, and I believe our readers will greatly appreciate your expert perspectives.
Adam Posen: Thank you! It was my pleasure to discuss these crucial issues.