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Government and Ruling Party Focused on Political Framework, Overlooking Diplomacy and Trade
On December 30th (local time) last year, Mexican President Claudia Sheinbaum holds a press conference regarding the revision of the General Import and Export Tax Law (LIGIE). [Mexico City EPA=Yonhap News]
The tariff bombshell from Mexico, arriving at the dawn of the new year, is by no means light news. Mexico has imposed high tariffs of up to 50% on 1,463 strategic items including Korean automobiles, machinery, and steel.
This is not a mere adjustment of specific items but a de facto trade sanction targeting the entire industry. While citing the protection of its domestic industry as the justification, the underlying intention is clear. It is a choice made with the United States in mind.
International Trade Moves Based on Interests, Not Morality
The problem is not Mexico's decision, but South Korea's response to it.
Mexico relies on the United States for over 80% of its total exports. If the United States-Mexico-Canada Agreement (USMCA) falters, its national economy will suffer a fatal blow.
As the United States pressured China, Mexico erected tariff barriers encompassing not only China but also countries with which it has not concluded free trade agreements (FTAs), such as Korea, India, and Vietnam, all at once.
It is a harsh but realistic choice. International trade moves not by morality, but by power and interests.
If the Steel Industry Collapses, the Entire National Core Industry Will Shake
On the other hand, what about Korea? The government's response has been limited to a request to "minimize the impact." Is this truly the response of a manufacturing nation? The steel industry, in particular, is already crying out.
Following global oversupply, the influx of low-priced Chinese products, and US protectionism, Mexico has now erected tariff barriers. Steel is the root of the national core industries that lead to automobiles, shipbuilding, defense, and construction. If this root is shaken, the entire manufacturing sector will collapse.
Government and Ruling Party Focused on Political Frames Rather Than Diplomacy and Trade
Despite this, the Lee Jae-myung administration and the Democratic Party appear to be more focused on political frames than on responding to the diplomatic and trade crisis. Internal affairs, partisan conflict, and calculations for local elections take precedence over national interests.
Diplomacy and trade are areas evaluated by their results. At the international negotiation table, national dignity is demonstrated not by words, but by power. The current response, frankly speaking, is pathetic.
Korean Citizens and Media Must Also Wake Up
However, the responsibility for the problem cannot solely be placed on the government and the political circle. The Korean media and citizens must also wake up.
The media allocates more space to sensational political disputes and verbal sparring than to the structural risks in trade, industry, and diplomacy. Instead of deeply analyzing the industrial impact of a 50% tariff, it is consumed as news for a day or two and then forgotten.
Citizens have also become accustomed to complacency, thinking, "Surely it won't affect us." The world has already entered a battle for survival, yet we remain in a peacetime mindset.
Reasons Why Mexico Included Korea in its Tariff List
Why did Mexico so easily include Korea in its tariff list?
First, Korea has not concluded an FTA with Mexico. Second, Korea's strategic presence has weakened in the US-centric trade order. Third, the Korean government failed to proactively manage trade risks. In international trade, silence is not neutrality but a weakness.
Diplomacy Perceived as Pro-China/Pro-North is Fatal to Industry
The direction must change, if only now. An integrated trade control tower for strategic industries such as steel and automobiles must be immediately activated. The national policy must shift to a foreign and trade strategy centered on national interests, not ideology. A diplomatic stance perceived as pro-China or pro-North is fatal to industry.
Mexico's 50% tariff is a warning. The government must break free from politics, the media from partisan strife, and the citizens from complacency.
Choi In-sak, columnist for Hankook Ilbo