Obama Slaps Ally in the Face with Steel Tariffs

Less than three years after finalizing a free trade deal, the United States impose tariffs again on South Korea.

Presidents Barack Obama of the United States and Park Geun-hye of South Korea walk in the garden of the Blue House in Seoul, April 25
Presidents Barack Obama of the United States and Park Geun-hye of South Korea walk in the garden of the Blue House in Seoul, April 25 (White House/Pete Souza)

Less than three years ago, the Obama Administration finalized a free-trade agreement with South Korea, one of America’s most important trading partners and allies in East Asia. The president was enthusiastic about the deal, saying it would “significantly boost exports that bear the proud label ‘Made in America,’ support tens of thousands of good paying American jobs and protect labor rights, the environment and intellectual property.”

Indeed, the International Trade Commission, an independent federal advisory body, said the deal could boost American exports by up to $12 billion per year and create as many as 280,000 jobs in the United States.

Yet the same Barack Obama is now rolling back trade with South Korea.

On Friday, his Commerce Department slapped a 10 to 16 percent tariff on South Korean steel. Smaller exporters elsewhere could face rates as high as 118 percent — a punishment for allegedly “dumping” steel into the American market at “unfair” prices, i.e., what happens if there is free trade.

The tariffs could become permanent if a special trade commission finds that the alleged dumping hurts American steelmakers — which, of course, it does. Which would, in turn, raise their profit margins while increasing costs for American consumers, including other businesses.

The Koreans expressed disappointment. “We had expected the American government to lead by example and resist protectionist pressure,” said a Korean embassy official in Washington DC.

They shouldn’t have been so surprised.

For starters, the 2011 trade deal only happened three years after Obama’s Republican predecessor, George W. Bush, had negotiated the whole accord. Democrats held up ratification for three years, demanding expanded unemployment compensation for workers whose jobs would be displaced by freer trade in return. The administration also reopened the negotiations to get a better deal for American automakers. The number of Korean cars that can be brought into the United States will remain restricted for years to come.

Obama’s record on trade has been altogether underwhelming. Despite urgings from allies such as Canada, Japan and Mexico, the president was slow to enter talks for the United States to join the Trans Pacific Partnership. Despite declaring “a new chapter of engagement” in relations with Latin America and recognizing that American exports to the region support over two million jobs in his country, the president did virtually nothing to expand trade relations in the Western Hemisphere. Rather than praising and seeking to imitate surplus economies such as China and Germany, Obama tried to pressure both into reducing exports and expanding domestic demand to give their American competitors a break. He even proposed giving companies that “invest in America, not ship jobs overseas” special tax exemptions. And while he — justifiably — blamed China for not “playing by the rules,” the president maintained bans on high technology and weapons sales to the Chinese as well as restrictions on foreign investment.

Obama sometimes talks the talk on free trade but just as often sounds more like a protectionist. Sadly, that is what he acts like, too, and it’s costing both American consumers and the South Koreans.

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