Washington: White House National Economic Council Director Kevin Hassett has highlighted the United States' ongoing trade deficits with South Korea, China, and Europe, attributing these deficits to the countries' high tariffs and non-tariff barriers. In an interview with CNBC, Hassett emphasized that these countries may face tariffs if they do not respond favorably to President Donald Trump's trade negotiations.
According to Yonhap News Agency, the Trump administration is preparing to implement country-specific "reciprocal" tariffs starting April 2. These tariffs will be tailored based on each U.S. trading partner's existing tariff and non-tariff barriers, as well as other factors such as exchange rate policies. Hassett noted the longstanding nature of trade deficits with Europe, China, and South Korea, attributing them to barriers that challenge U.S. firms' competitiveness.
Hassett expressed optimism that many countries would respond positively to Trump's trade negotiations, describing the president as "flexible." However, he acknowledged that some countries might resist change. "And the countries that don't are going to have to pay the tariffs. That's the way it is," Hassett stated.
The issue is particularly pressing with South Korea, which had a trade surplus of US$55.7 billion last year, raising concerns about its potential focus under Trump's trade policies. In a recent address to Congress, Trump claimed South Korea's tariffs are significantly higher than those of the U.S., despite the Asian country's tariffs being under 1 percent under a bilateral free trade agreement.
Addressing market concerns about the uncertainty of Trump's trade policies, Hassett assured that clarity would emerge by April 2. "Markets will see that the reciprocal trade policy makes a great deal of sense," he said, adding that countries adhering to the rules would not be unduly affected.
Secretary of State Marco Rubio also emphasized the administration's intent to reset trade baselines to ensure fairness, criticizing the current global trade environment as "completely unfair" to the U.S. He suggested that countries could negotiate bilateral deals that are equitable, warning against negotiating from the existing status quo.
Rubio's comments hinted at the possibility of reassessing the fairness of the U.S.-South Korea bilateral free trade agreement, underscoring the administration's focus on rebalancing trade relationships.