"Made in USA, 0% Tariffs" A simple rule of high tariffs on overseas products and zero tariffs on products made in the US is shaking up global supply chains. Hankyoreh Graphics

President Trump's reciprocal tariff strategy is not just a simple trade policy to resolve trade deficits. At its core is an industrial strategy to reshape global supply chains and attract foreign companies to the US.

The rule is simple. Products manufactured in the US have a 0% tariff, while products made overseas are subject to high tariffs of 15-40%. Strategic industries face up to 40%, while general consumer goods are around 15%.

Production bases in emerging economies like Vietnam, India, and Mexico have been hit directly, and Japan and Europe have not been spared. Conversely, setting up factories in the US offers not only tariff exemptions but also political benefits from increased employment and investment.

The choice for businesses is clear. Rather than maintaining low-wage overseas bases and bearing tariffs, it is calculated that it is better to invest directly in the US and receive the benefit of "0% tariffs." This is why companies like Samsung Electronics, TSMC, and Japanese automakers have invested in the US one after another.

Japan is a prime example. The Japanese automotive industry initially faced the threat of a 25% tariff but had it reduced to around 15% on the condition of promising US investment worth $550 billion.

The European Union, including Germany and France, also secured tariff deferrals for some items by pledging to increase agricultural imports and expand local factory construction.

South Korea's Samsung Electronics built a $17 billion semiconductor plant in Texas, while LG and SK expanded their battery joint ventures. Taiwan's TSMC invested $40 billion in Arizona, thereby avoiding tariffs and securing national security guarantees.

For the past 30 years, global trade has operated on a globalization structure of producing in low-wage countries and consuming in developed countries. However, the reciprocal tariff strategy directly challenges this order.

Products from emerging economies face tariff bombs, while products made in the US are exported duty-free. The diversified production strategies of global corporations are being effectively nullified, and a US-centric forced reshoring is underway.

The US government institutionally supports this trend by providing subsidies through the Inflation Reduction Act (IRA) and the CHIPS Act. If reciprocal tariffs are the stick, subsidies are the carrot. The US is narrowing the options for foreign companies by combining these two.

Trump's goal is clear: to make the US the "world's factory" again. This is not merely about reducing trade deficits but an industrial hegemony strategy to export products made in the US to the world under the "Made in USA" brand.

However, there are also problems. The high-wage structure in the US leads to increased manufacturing costs, burdening prices, and labor union issues and employment instability remain potential risks.

Skepticism is being raised among experts, with the view that "even with increased investment, it will be difficult to lead to large-scale employment effects as in the past." Dissatisfaction is also growing among allied nations. While Japan and Europe are forced to accept investment demands, emerging economies face concerns of growth slowdown and foreign exchange crises as their export routes are blocked.

However, there is no force to resist this. The reciprocal tariff strategy has already become a reality and a rule.

The problem lies in South Korea's response.

The Lee Jae-myung administration is holding out with political rhetoric like "we will not sign if it goes against national interests," but it fails to properly recognize the global trend of expanding production within the US.

This is no different from the Regent Heungseon Daewongun's isolationist policy, going against the tide of world history and shutting oneself off. The price for ignoring the changed rules will inevitably return to South Korean companies, industries, and citizens as a greater cost.

In particular, South Korea is not only placed in a disadvantageous position in its relationship with the US due to the reciprocal tariff strategy but also still has high trade dependency with China. Therefore, the focus of South Korea's foreign and economic policy should be on "how to redefine the relationship with China." This is not simply a matter of US negotiation tactics but a matter of finding a path for South Korea to survive amidst the reshaping of global supply chains.

In the next part ③, we will continue this discussion, exploring how to reconfigure the relationship with China under US pressure and the strategic directions South Korea can choose.

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