If former President Donald Trump is re-elected, South Korea’s agricultural exports may face challenges due to anticipated U.S. trade policies. Tariff increases and other protective measures could erode the price competitiveness of South Korean agricultural goods in the U.S. market, potentially slowing export growth and worsening South Korea’s agricultural trade balance with the U.S.
According to the “2024 U.S. Presidential Election: Implications for Agriculture and Trade Policies” report released by the Korea Rural Economic Institute (KREI) on Tuesday, if Trump is elected, he is expected to actively seek to improve the trade balance with countries that have previously maintained a trade surplus with the U.S.
In the agricultural sector, the report indicates that Trump might raise tariffs to curb imports of foreign agricultural products into the U.S. Simultaneously, he could push for removing tariffs or non-tariff barriers in exporting countries to boost American agricultural exports.
If tariffs are raised, South Korean agricultural products will likely struggle to compete with U.S. products in terms of price. Given the recent increase in agricultural and food exports to the U.S., a drop in price competitiveness could slow export growth, potentially impacting domestic supply and pricing of agricultural goods.
There are also concerns that customs procedures could become more stringent, as last year, 30% of South Korea’s agricultural export clearance issues were in the U.S. The report also speculates that the U.S. may pull out of the Indo-Pacific Economic Framework (IPEF), potentially abandoning environmental and labor standards in agricultural trade.
The KREI report further warns that the U.S. might push for amendments or renegotiations of the Korea-U.S. Free Trade Agreement (FTA). While the FTA has largely eliminated agricultural tariffs, the U.S. could push for additional concessions on non-tariff barriers, such as quarantine requirements for beef and fruit, and request revised import routes for products like cheese.
Reflecting on Japan’s leadership in transforming the Trans-Pacific Partnership (TPP) into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after the U.S. withdrawal, the report suggests South Korea may need to consider alternatives if the U.S. exits the IPEF. KREI recommends leveraging digital trade facilitation under the IPEF framework to promote agricultural export growth.
Furthermore, KREI emphasizes the importance of diversifying agricultural export markets to reduce dependency on the U.S., recommending expanded exports to regions like Europe and Southeast Asia. A KREI official noted, “Identifying leverage items that create mutual interests in trade negotiations is crucial. A proactive and well-prepared strategy will be essential to navigate expected demands for changes to trade requirements.”