hankyoreh

US President Donald Trump attends an event for St. Patrick’s Day on March 17, 2026. (EPA/Yonhap)

By Ahn Seon-hee, editorial writer

On Sept. 2, 1987, 41-year-old real estate developer Donald Trump took out a full-page advertisement in The New York Times.

“Over the years, the Japanese, unimpeded by the huge costs of defending themselves (as long as the United States will do it for free), have built a strong and vibrant economy with unprecedented surpluses. [. . .] ‘Tax’ these wealthy nations, not America,” the ad said.

That ad contains the seeds of the tariff war that Trump has been waging against the whole world since he returned to the presidency last January.

Considering that Trump’s obsession with tariffs has persisted for 40 years now, perhaps it was naive to hope the trade war would recede into the background, even briefly, if the US Supreme Court would only strike down his reciprocal tariffs.

Sure enough, shortly after the Supreme Court issued that ruling, the US government launched investigations against Korea and other US trading partners on March 11 under Section 301 of the Trade Act of 1974. Trump is looking for a fresh excuse to impose new tariffs.

Koreans are anxious that the Section 301 investigation may result in Korea facing tariffs higher than even the rate reached in negotiations with the US last year. There are also concerns that Trump may slap Korea with punitive tariffs if it refuses to send troops to support the US’ war against Iran.

Simply put, Trump isn’t going to let go of tariffs as long as he’s in office.

That said, will everything be fine and dandy once Trump’s second term comes to an end? Will we be able to go back to the peaceful era of free trade — back to the peak of globalization, the 20 years following the fall of the Berlin Wall in 1989? To the happy era when the world’s division of labor was clear: the US focused its efforts on developing cutting-edge technology, finance and the hospitality industry; South Korea, Germany and Taiwan concentrated on high-value-added industries such as manufacturing; China oversaw low-value-added industries? The era when the per capita income of Korea leapt from US$10,000 to US$30,000, and when companies like Samsung Electronics and Hyundai Motors made their mark on the world as global companies?
 
To answer this question, we should pay attention to three major dynamics in American society — a society that put a political outlier like Trump in the White House not once, but twice.
 
The first is the anger felt by those on the losing side of globalization.  

A close look at American economist Branko Milanović’s well-known elephant curve shows that the biggest beneficiaries of globalization were the middle class in Asian countries with developing economies — led by China — and the high-income groups in developed countries like the US. The income growth rate for those groups from 1988 to 2008 reached 70%. 

In contrast, the income growth rate for the lower-middle class in developed countries remained between 0% and 20%. These are the white working-class people of the Rust Belt, the very demographic that Trump tapped into for his base.
 
The second dynamic relates to the renewed recognition of the importance of American manufacturing and a push to revive it. Robert Lighthizer, the US trade representative during Trump’s first term, once said that a strong manufacturing base is essential for a prosperous future, and more and more people seem to agree with that sentiment. 
 
John Arnold, a noteworthy investor and hedge fund manager, stated in 2024 that “America has the ability to invent. China has the ability to build. The first country that can figure out how to do both will be the superpower.” Books that call for the Democratic Party to become a more “productive” party that embodies “liberalism that builds,” like “Abundance,” and slam the US for being stagnant as a country being run by lawyers while China is run by engineers (“Breakneck”), were everywhere in 2025.
 
The third dynamic relates to recognition of the threat posed by China. As evident in comments made by George H. W. Bush in 1989, the US believed that “as people have commercial incentive, whether it’s in China or in other totalitarian systems, the move to democracy becomes more inexorable.”
 
After establishing diplomatic relations with China in 1979, the US expanded investment and trade in China, allowing China to become a member of the World Trade Organization in 2001. However, despite rapid economic growth, China did not move toward democratization. 

Upon his inauguration in 2012, President Xi Jinping strengthened the Chinese Communist Party’s regime and heralded the “Chinese Dream” as a means to challenge US hegemony. In terms of the global market, China now dominates almost all sectors of manufacturing, from toys to electric vehicles, and has now set its sights on cutting-edge technology like artificial intelligence.
 
No matter who comes after Trump, there’s little chance that they can totally ignore or reverse these dynamics. Whether through Trump’s ruthless methods or the more moderate method of providing subsidies, the protectionist attempts to defend the US’ technological hegemony, market, and jobs will persist.
 
This is, of course, a major challenge to Korea’s existing growth strategy leaning on big businesses, exports and manufacturing for development. As the US and China fiercely vie for dominance in both innovation and manufacturing, Korean companies are finding themselves locked in tough battles of their own.
 
The walls surrounding the US market, the biggest export market for Korean companies, will only grow taller. Conglomerates such as Samsung Electronics and Hyundai Motors will find themselves identifying more as “global” companies rather than “Korean” ones, reducing investments and hiring in Korea. Those companies will continue to flourish, but the revenue they earn will go to their shareholders, not to the Korean economy. Our belle époque is over; now, we have to grapple with serious questions. 

Please direct questions or comments to [english@hani.co.kr]