Korea in Trump's sights as tit-for-tat tariff war rages

Agencies

South Korea could next be engulfed in the global trade war after US President Donald Trump accused the country of having more unfair tariffs against American products than China.

After Trump's attack, South Korea's acting President Choi Sang-mok yesterday ordered a review into the impact of US tariffs on Canada, Mexico and China that came into force this week.

Choi also ordered support measures to be prepared for domestic firms operating businesses in those countries and to be ready for consultations with the United States at a working level on reciprocal tariffs expected to be announced next month.

In an address to Congress on Tuesday, Trump said that South Korea's average tariff was four times higher than the level in the US, despite what he said was all the military and other assistance the US provided to the country.

He highlighted his tariff plans and said it was now the turn of his country to use tariffs against other nations in the way they had against America.

South Korea disputed this and its trade ministry said tariff rates on imports from the US stood at around 0.79 percent as of last year under the free trade agreement between the countries.

Trump's new 25 percent tariffs on imports from Mexico and Canada took effect on Tuesday, along with fresh duties on Chinese goods, sparking trade wars that could slam economic growth and raise prices for Americans still smarting from years of high inflation.

Canada hit back with 25 percent tariffs on C$30 billion ($162 billion) worth of US imports, and Beijing retaliated with tariffs of up to 15 percent on a wide array of US farm exports.

However, US commerce secretary Howard Lutnick told Fox News that Trump was poised to offer Canada and Mexico a compromise on tariffs.

Meanwhile, Trump is also preparing measures to try and boost US shipbuilding to counter China's dominance of the industry, according to a report from the Wall Street Journal.

The administration is planning 18 actions from raising revenue through fees on Chinese-built ships and cranes entering the United States, to setting up a new office at the National Security Council, the newspaper reported, citing a draft summary of an executive order it reviewed.

China has the world's largest shipbuilding sector, producing more than half of the merchant vessels globally, while the US industry has been in decline. The Trump administration has proposed fees on the use of China's commercial ships following a trade investigation into the nation's maritime practices.