Wendy Cutler comments on 25% tariffs on Japan and South Korea

Wendy Cutler, Vice President of the Asia Society Policy Institute and former Deputy U.S. Trade Negotiator, has voiced strong concerns over U.S. President Donald Trump's recent decision to impose a 25% tariff on imports from Japan and South Korea starting August 1, calling the move “unfortunate” and urging that  it could have far-reaching consequences for U.S. trade and diplomatic relations.Cutler emphasized that both Japan and South Korea have long been vital allies and economic partners of the United States. “It’s unfortunate that the President has announced 25 percent tariff hikes for two of our closest allies,” she said. “Both have been close partners on economic security matters and have a lot to offer the United States on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation.”

She noted that companies from both countries have invested heavily in American manufacturing, generating high-paying jobs and boosting local economies. “These are not just trading partners, they are job creators and major consumers of American exports, including beef, pork, medical devices and aircraft,” Cutler added.On the specifics of U.S. trade relationships, Cutler pointed out that as a Free Trade Agreement (FTA) partner, South Korea has already eliminated nearly all tariffs on U.S. goods, leaving it with fewer concessions to offer compared to other high-tariff countries like India or Vietnam. She also acknowledged the political transition in Seoul, suggesting the newly formed South Korean government needed more time to prepare for substantive trade talks.

Tensions have also been building with Japan, according to Cutler, particularly as the U.S. appeared to expect Japan to make rapid concessions. “The President’s growing frustration with Tokyo has been evident in recent weeks,” she said. “However, with Japan’s Upper House elections approaching on July 20, Prime Minister Ishiba’s flexibility is understandably limited, especially on sensitive sectors like autos and agriculture.”Cutler expressen concern that the tariff announcement could undermine broader trade diplomacy, suggesting it sends a “chilling message” to other U.S. trading partners. “It suggests that the U.S. will not be open to reprieves from the Section 232 sectoral tariffs, including on autos, which are of high importance to both Japan and South Korea.”Despite the disappointment, Cutler held out hope for a resolution. “While the news is disappointing, it does not mean the game is over,” she said. “We cannot rule out a breakthrough in negotiations in the lead up to August 1, when the additional tariff hikes are to take effect.”