[Inside Chodong] The Illusion of the "Safest Market"

Trump Administration's Protectionism Now Threatens Even Allies' Security
Tariffs and Worker Crackdowns Deliver Shock to Korean Businesses
"We Can No Longer Rely Solely on the United States"... Companies Rethink Their Strategies

"The United States is still the safest market."

This is what James Kim, Chairman of the American Chamber of Commerce in Korea (AMCHAM), said during a recent meeting. Even though President Donald Trump acts with calculated spontaneity and sometimes shakes the market and pressures allies with unilateral and aggressive policies, there is an underlying belief that the United States is a country that can correct itself. There is confidence that, even if a wrong decision is made, Congress, the courts, the media, and the market will function to put things back on track. I could somewhat agree that this institutional resilience is what makes the United States still appear to be a trustworthy market.

However, the recent actions of the Trump administration have gone beyond simple protectionism and have reached a level that threatens even the security of allied nations. With high tariffs announced not only on automobiles, steel, and battery components but also on semiconductors and pharmaceuticals, Korean export companies are facing an overwhelming situation.

President Lee Jae-myung and U.S. President Donald Trump are holding a summit at the White House in Washington DC, USA, on the 25th (local time). 2025.8.26 Yonhap News Photo by Yonhap

Even more shocking than the tariffs was the large-scale crackdown on Korean workers at a battery plant in Georgia. The incident, in which workers were detained overnight due to visa issues, went beyond mere law enforcement and revealed a reality where even allied nations and companies that have promised investment and employment in the United States cannot be guaranteed safety. As trust between countries was shaken, corporate sites froze instantly.

After this incident, Korean companies have changed their calculations regarding the United States. As people who went to build factories and transfer technology were suddenly arrested and detained, the perception spread that there is no reason to invest hundreds of trillions of won in the United States if our safety continues to be threatened. Among business leaders, it is now openly said that "we can no longer rely solely on the United States." With tariffs, regulations, and now unpredictable crackdowns piling up, the situation has reached a tipping point. The perception that it is necessary to reduce dependence on the United States and seek new paths is spreading. In fact, market diversification is accelerating. According to an analysis by the Korea International Trade Association, immediately after the implementation of tariffs by the Trump administration's second term, global export volume decreased by 20.8%, but exports to countries other than the United States actually increased during the same period.

The reasons Korean companies have consistently ranked the United States as their top choice were clear. As the world's largest consumer market and a stable investment destination, the rewards justified the risks. The ecosystem, where capital and talent are concentrated, was a strength not easily found elsewhere. However, recent uncertainties are shaking this premise. Market size alone is no longer persuasive, costs are rising, and prospects are shrouded in thick fog. The United States' edge as an investment destination is fading rapidly, and now, the country appears to be a more unstable market than many emerging or developing nations.

Of course, the United States may eventually regain its balance. As Chairman Kim said, the American system has the power to self-correct. However, by the time recovery arrives, countries that once stood by the United States may have already turned toward other markets. Korea and other partner nations are expanding their markets, reducing dependence on the United States, and strengthening ties with Europe and Asia. The global supply chain no longer revolves around a single country. As anxiety and threats grow, capital and technology inevitably seek alternative paths, and that flow is difficult to reverse. The moment the United States, the world's leading power, should fear most is when other countries become accustomed to living without depending on America as the "center of the world." When friends leave, neither technology nor jobs remain.