Last Sunday, March 30, China, Japan, and South Korea held their first economic dialogue in five years, reflecting the desire of these Asian countries to facilitate regional trade in preparation for countering the negative impact of tariffs from President of the United States Donald Trump.
It is worth noting that Beijing, Tokyo, and Seoul rely heavily on exports in the context of economic activity. It is obvious that the opportunity to earn on external shipments will decrease against the background of Washington’s tightening tariff policy. Under the appropriate conditions, there is a virtually inevitable need to diversify export activities. To a certain extent, the economic dialogue between Japan, China, and South Korea is forced. Countries need to expand their interaction with various players in the global trade space in an environment where the scale of exports to the United States will inevitably shrink.
According to a statement released after the meeting of the trade ministers of China, Japan, and South Korea, an agreement was reached to hold comprehensive and high-level negotiations on a free trade deal between Beijing, Tokyo, and Seoul. It was noted that in this case, the goal is to promote regional and global trade.
South Korean Trade Minister Ahn Duk-geun, referring to the Regional Comprehensive Economic Partnership, stated that it is necessary to strengthen the implementation of RCEP, in which all three countries participated, and form a framework for expanding trade cooperation through appropriate negotiations between Seoul, Beijing, and Tokyo.
The ministers met ahead of Donald Trump’s announcement of a tariff increase on Wednesday, April 2. These measures significantly change Washington’s trade partnerships. Tariff increases will also have consequences for the entire global economy.
It is worth noting that the international order of things established in recent years provided that China, Japan, and South Korea were the largest trading partners of the United States. At the same time, in recent years, the relationships between the mentioned countries have not been ideal or at least relatively positive. The points of tension were territorial disputes and Japan’s release of wastewater from the wrecked Fukushima nuclear power plant.
Last week, Donald Trump announced 25% tariffs on imports of cars and auto parts. These measures are most likely to cause financial losses for Asian automakers, which are among the largest exporters of vehicles to the United States. For example, data from S&P indicates that South Korea is the largest supplier of cars to the US after Mexico.
The trade ministers of China, Japan, and South Korea have agreed on another meeting.
As we have reported earlier, China’s Factory Activity Accelerates.
