Trump's Asia tour: Trade 'beef' with South Korea a potential obstacle for US


Trump prepares for Asia trip amid increasing tensions with North Korea

During the White House press briefing, National Security Advisor H.R. McMaster discusses what President Donald Trump hopes to accomplish during his 10-day trip to Asia.

President Donald Trump will begin a 12-day trip to Asia on Friday, and he could face tensions in South Korea where United States’ trade and geopolitical interests are concerned.

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Strategies for dealing with North Korea and international trade will be the main topics for the trip, Gordon Chang, author of “The Coming Collapse of China,” told FOX Business, and Trump will have to tread a fine line between those two issues in Seoul.

“For [strategies to deal with] North Korea, he will want to keep South Korea on his side,” he said. “But when it comes to trade [Trump] will want to raise some particularly difficult issues because they have been predatory on trade.”

Tech giant Qualcomm (NASDAQ:QCOM) is a critical source of trade strain between the two allies, Chang said. In December, the Korea Fair Trade Commission found the chip-make guilty of employing unfair trade and monopolistic practices. Qualcomm said the ruling and resulting fines represent “a violation of due process rights owed American companies under the Korea-U.S. Trade Agreement (KORUS).” Chang agreed, saying the decision ignored important procedural requirements guaranteed to a U.S. company.

The U.S. International Trade Court (ITC) also recently ruled in favor of Whirlpool (NYSE:WHR), which brought a complaint against its South Korean competitors LG and Samsung over unfair trade practices related to washing machines. The commission is set to recommend penalties to the Trump administration before year’s end.

“We’ve got real big beef with South Korea on trade,” Chang said. “[But] I think that, whatever happens, Trump probably will moderate his complaints on trade in order to get the government’s cooperation on North Korea.”

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Chang also noted that it’s significant that the president will visit Japan and South Korea before he heads to China.

“American presidents have traditionally gone to china first,” he noted. “We’re emphasizing our allies. China is stuck in the middle of the itinerary and I think that’s a good thing.”

Chang said U.S. presidents have previously ignored the Japanese, particularly when it comes to warnings about North Korea. Trump is paying attention to what they’re saying, which is important, he said.

With respect to China, Chang said that Trump needs to put more pressure on Beijing in order to incentivize them to help more with geopolitical issues, specifically North Korea.

Trump will begin his trip in Hawaii on Friday, from where he will head on to five Asian countries including Japan, South Korea, China, Vietnam and the Philippines.

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