[The Editors' Verdict] The Fog Called 'Trumpism'

The ‘Trump fear,’ a mix of illusion and reality, still lingers heavily. Listening to and reading the recent interpretations and forecasts, it feels as if our economy might collapse in about three to four years. If the economic resilience of the Republic of Korea is truly that poor, then this is not just a matter of whether Trump is in power or not. It is therefore important to calmly assess the priorities and severity of risks, while strongly assuming the possibility of friction in diplomacy and trade.

The first battlefield to gauge the reality of this fear is likely to be Mexico. Last year, Mexico’s trade surplus with the U.S. was $130 billion, second only to China’s $380 billion. When political and social issues such as immigration and drugs are factored in, the domestic political sensitivity could be even higher than China’s. At the top of the ranking list by the UK’s Economist Intelligence Unit (EIU), which lines up countries vulnerable to Trump risks based on current account balances and free trade relations, Mexico holds the highest position.

In response to Trump’s tariff threats, Mexico’s Minister of Economy recently raised tensions by declaring retaliatory tariffs in an interview with domestic media. Although the tone of the exchanges seems explosive, looking back, this is a replay of the power struggle during Trump’s first term eight years ago. That dispute was largely resolved within a few months through bilateral negotiations on the North American Free Trade Agreement (NAFTA). The roots of mutual interdependence and multilateralism, whether liked or not, are this resilient.

In the EIU ranking, South Korea is tenth, one step below Ireland. While a lame-duck Trump might now be more determined and could achieve some victories in Mexico, the likelihood of conflicts extending through critical countries like China, Canada, Germany, Japan, and Taiwan to reach South Korea is low. Moreover, amid the Russia-Ukraine war and Middle East conflicts, the scenario of simultaneously opening dispute tables with these countries is far-fetched. Regarding universal tariffs, since they induce trading partners to raise product prices, causing domestic inflation as a backlash, it is reasonable to view their feasibility and severity as uncertain.

Major U.S. media outlets such as The New York Times, The Wall Street Journal, The Financial Times, and The Washington Post are covering key news including allegations of underage prostitution against the nominee for Attorney General, various judicial risks and controversies surrounding Trump’s close associates, and political dynamics. Like leaders of any other country, Trump’s urgent task is to overcome the domestic political hurdles that loom like a mountain range. This suggests there is no need to take Trump’s external image and his boasts at face value or to overly entangle ourselves in what is called ‘Trumpism.’

Going forward, what is important is to clearly distinguish our substantive interests and losses, and to identify how the Trump administration operates on the front lines and who exercises influence at various points. From the shipbuilding industry, which Trump openly proposed immediately after his election, to defense, the new business territories are within visible reach. The hundreds of billions of dollars already invested or promised by companies like Samsung Electronics and Hyundai Motor are our trade assets and business leverage that even Trump would find difficult to dismiss.

President-elect Donald Trump of the United States. Yonhap News