[US Tariff Season 2] Trump's Unilateral 'Transactional Diplomacy' Threatens Again with Stronger Section 301

It has been one year since U.S. President Donald Trump declared the imposition of reciprocal tariffs (April 2, 2025). With a brief grace period given to pressure negotiations, and by ignoring international trade practices to maximize America’s short-term interests through so-called “transactional diplomacy,” the global trade order has been reshaped.

On April 2 last year (local time), U.S. President Donald Trump spoke about reciprocal tariffs during the 'Make America Wealthy Again' event held at the White House Rose Garden in Washington D.C., displaying a chart. Photo by AFP News Agency

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Faced with higher tariff barriers, Korean companies have encountered the difficult challenges of high-cost local investment and supply chain relocation. They have also had to grapple with various issues such as unfavorable exchange rates and a decline in the quality of the local workforce. In some sectors, such as shipbuilding and the defense industry, the expansion of Korea-U.S. cooperation has provided new breakthroughs.

It was the U.S. Supreme Court that put a stop to President Trump’s unrestrained course of action. The court drew a clear line by ruling that the unilateral imposition of tariffs was illegal, ushering in a new phase in the tariff dispute. In response, President Trump invoked Section 122 of the Trade Act to impose a universal tariff of 10% for a temporary period of 150 days. This measure is set to expire on July 24, but the administration intends to continue existing actions via Section 301. Section 301 allows for retaliatory tariffs or other measures, following investigation and consultation, if the other country's actions are deemed to burden or restrict U.S. trade.

The U.S. government has already begun investigations not only into China, but also into its allies and major trading partners such as the European Union (EU), Japan, Korea, Mexico, and India. It is highly likely that the results of these investigations will be tailored to legitimize the tariffs sought by the Trump administration. The moment the U.S. defines another country’s policy as “unfair or discriminatory,” even allies can become targets of trade pressure without exception. Accordingly, there are analyses suggesting that future diplomatic and trade friction with allied countries will be inevitable.

However, there are questions as to whether these measures have actually made the United States stronger. On “Liberation Day” (April 2) a year ago, President Trump announced the imposition of reciprocal tariffs with a number of rosy forecasts: “the rebirth of American industry,” “making Americans wealthy,” and “earning trillions of dollars to pay off debt.” The Tax Foundation, a tax policy think tank, evaluated the past year’s tariff dispute and criticized that the tariffs were not reciprocal and did not result in a surge in investment, manufacturing, or employment. Instead, the organization assessed that tariffs contributed to higher prices and weakened economic activity. This is why some analyses suggest that even with Section 301 in effect, it will be difficult for the United States to achieve its intended results.

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