Trump's trade adviser denounces Samsung, LG

Peter Navarro, head of the White House National Trade Council, blasted Samsung Electronics and LG Electronics by accusing them of "trade cheating" at a general meeting of the National Association for Business Economics (NABE) on Monday (U.S. time). He claimed that the U.S. had decided to levy anti-dumping tariffs on the two companies’ washing machines manufactured in China early this year, but the South Korea-based firms dodged the duty by exporting products from at their plants in Vietnam and Thailand rather than Chinese plants. Navarro’s statement that U.S. company Whirlpool is struggling due to the Korean companies’ shifting of producing countries is the kind of remarks that can only be made by someone who speaks for a company’s interest.

The head of NTC, which serves as the command central for Washington’s trade policy along with the U.S. Commerce Department, could side with his country’s companies at a gathering that draws attention from its business community. However, if his remarks are senseless and effectively defame foreign companies, they cannot and should not be tolerated. It is natural that companies switch their production bases to seek cheaper labor and advanced technology amid a fast changing global trade environment. Even if Washington chose to impose anti-dumping tariffs due to the Korean companies’ shifting of its production bases, a foreign country government should not interfere with the companies’ managerial decision. Moreover, it was as recently as February 3 that U.S. President Donald Trump tweeted, “Thank you, Samsung!” for the company’s decision to construct a production plant in the U.S. Is the U.S. government trying to discipline Korean companies in a matter of just a month?

Washington might be making such argument in the economic arena that is inconsistent while extending cooperation with Seoul in early deployment of the terminal high altitude area defense system amid mounting threat of North Korea’s nuclear weapons because it considers the South Korea-U.S. alliance only as means for security. The U.S. is poised to strengthen its protectionist trade policy in the wake of increased trade deficit for January that hit the highest level in five years. However, the South Korea-U.S. Free Trade Agreement has also helped increase South Korean companies’ investment in the U.S., while the U.S. has posted a massive surplus in service trade with South Korea. The South Korea-U.S. alliance also implies the sharing of economic prosperity as well.

Navarro’s criticism of Samsung and LG came at a time when South Korean Trade, Industry and Energy Minister Joo Hyung-hwan is visiting the U.S. to meet with U.S. Commerce Secretary and other officials. Irrespective of outcome of Seoul-Washington talks, the NTC chief’s remarks constitute a diplomatic gaffe. If the U.S. does not respect South Korea as an economic cooperation partner, no change can be expected in Washington’s stance even if Korean Deputy Prime Minister for the Economy and Finance Minister Yoo Il-ho meets with U.S. Treasury Secretary at the G20 meeting on March 17. The South Korean government should serve as the guardian for Korean companies. Only then will the government be entitled to demand companies to expand investment or create jobs.