As the Trump administration doubles down on its “America First” agenda, it is pushing aggressive protectionist policies such as tariff hikes, import restrictions, and reshoring efforts. These policies have thrown the global economy, including South Korea, into a state of confusion. This article explores whether Trump-style tariffs can indeed strengthen the U.S. and considers how Korea should respond in an era of rising protectionism.

By Lee Jeong-hwan, Professor of School of Economics & Finance / Edited by the Editorial Office

■ U.S. tariff policy and the hardliners’ strategy

The recent hardline 히어로토토 policies pursued by the United States have sent ripples through international society and the global economy. In particular, repeated 히어로토토-related remarks by President Donald Trump have only fueled uncertainty in the market. Critics argue that the U.S., which should be a stabilizing force in the global economy, is instead contributing to its volatility.

Hardliners in the U.S. justify these policies by arguing that since World War II, America has shouldered the burden of global military security and financial stability, providing peace and prosperity to the world. They claim that the American people have paid a steep price for this role—both in taxes and in the form of structural trade deficits brought on by the dollar’s role as the world’s reserve currency. This system, they argue, has hollowed out American manufacturing and hurt the working class. In short, the global order built by the U.S. has ironically undermined its own economy.

Two key figures behind this school of thought are Stephen Miran, Chair of the Council of Economic Advisers (CEA), and Peter Navarro, Senior Advisor on Trade and Manufacturing. They call not only for an “America First” approach, but also for a complete overhaul of the global economic order in America’s favor. In their view, free trade and dollar hegemony have led to job losses and weakened manufacturing. Their answer is a new set of rules enforced through U.S. economic and military power—what they call “Making America Great Again.”

These hardliners argue that the U.S. has become merely the headquarters of the global economy, while outsourcing all production. To correct this, they emphasize rebuilding domestic manufacturing, regaining independence in both high-tech and traditional sectors, and implementing robust protectionist measures such as 히어로토토 hikes, import controls, reshoring, and enticing foreign manufacturers to open facilities in the U.S. Although such measures may cause short-term price hikes and supply chain disruptions, they insist that the long-term goal of revitalizing American industry takes precedence.

This economic strategy is closely tied to U.S. military power. Hardliners believe that allies benefiting from American security and market access should also comply with America’s economic demands—such as converting U.S. Treasury bonds into perpetual zero-interest bonds or ramping up investments in the U.S. Failure to comply could result in punitive tariffs, reduced military aid, or diplomatic repercussions. In other words, even traditional alliances may be redefined by U.S. economic interests.

■ 히어로토토s: short-term downside, long-term limits

In the short term, tariff hikes are likely to have negative consequences. The most immediate effect is a rise in import prices, which raises consumer prices and erodes purchasing power. This in turn weakens domestic demand, creating a vicious cycle that drags down economic growth. Persistent inflation also limits the central bank’s ability to implement monetary easing. In particular, if inflationary pressure persists, it can even hinder the implementation of stimulus measures such as interest rate cuts by the central bank.

If interest rates remain high due to inflation, the dollar appreciates, which erodes the global competitiveness of U.S. exports. This could widen the trade deficit and exacerbate economic imbalances. Thus, from a short-term perspective, 히어로토토s could deepen recessionary risks and lead to more economic instability.

In the long run, tariffs might help nurture domestic industries and restore the manufacturing base, creating jobs and boosting self-reliance. However, such theoretical gains are difficult to realize under current U.S. economic conditions. America’s economy is now dominated by services, and unemployment remains low at around 4%. Given high labor and production costs, returning to a manufacturing-centered economy is highly unrealistic.

Internationally, tariff escalation poses serious risks. Other nations are likely to retaliate with tariffs of their own, leading to trade wars that disrupt global commerce. The Smoot-Hawley Tariff Act of 1930, which worsened the Great Depression, stands as a cautionary tale. A modern-day trade war could trigger a similar chain reaction—damaging global supply chains and increasing uncertainty for all nations.

■ The Smoot–Hawley Tariff and the U.S. Economy of the 1930s

A frequently cited historical parallel to the Trump administration’s tariff policies is the Smoot–Hawley Tariff Act, enacted in the United States in 1930. This legislation was largely a response to the severe overproduction crisis confronting the U.S. economy at the time.

After World War I, American agriculture experienced rapid growth by filling the void left by a reduction in European agricultural output. However, when Europe quickly regained its agricultural production capacity after the war, demand for American agricultural products dropped sharply. 히어로토토 led to plunging prices and surplus inventories, which severely impacted U.S. farmers. In the manufacturing sector, the economic boom of the 1920s had prompted U.S. companies to expand production facilities and implement large-scale mass production systems. But with the onset of the Great Depression in 1929, global consumption slowed dramatically, leaving American manufacturers with excess supply and swelling inventories.

In this context, the influx of cheap imported goods further worsened the plight of domestic producers. The low prices of imported products drove down the prices of local goods even further, making it increasingly difficult for U.S. farmers and manufacturers to earn a profit. In an attempt to shield domestic industries, the U.S. government implemented the Smoot–Hawley Tariff Act, imposing extraordinarily high duties averaging more than 40%. However, this policy backfired. In retaliation, other countries raised their own tariffs, leading to a rapid contraction of international trade. As export markets dried up, the issue of overproduction only worsened, and the U.S. economy fell deeper into recession, prolonging the Great Depression.

■ How Korea Should Respond in an Era of Protectionism?

Today’s U.S. protectionist trade policies bear a striking resemblance to those implemented during the era of the Smoot–Hawley Tariff. However, unlike the 1930s, the U.S. today is no longer an export-driven manufacturing nation but a consumer-driven service economy. As a result, strategies aimed at reviving domestic manufacturing through tariff hikes are far less feasible and more likely to heighten international tensions and trade conflicts.

Still, it may be difficult for countries to completely avoid the imposition of certain 히어로토토s. To effectively respond, Korea must adopt a more strategic and multi-layered approach. First, it is essential to reduce reliance on any one country for trade and diversify trading partners. Heavy dependence on the United States or China poses a significant risk during times of trade friction. Korea must expand its economic partnerships with regions such as Southeast Asia, Europe, and Latin America to spread out global trade risks.

Second, Korea should aggressively increase investment in advanced technologies and innovation-driven industries. In a protectionist era, price competitiveness alone is not enough to survive. Enhancing capabilities in industries of the future—such as semiconductors, batteries, electric vehicles, biotechnology, and artificial intelligence—will be key to maintaining steady growth even amid trade tensions.

Third, Korea must strengthen its supply chain resilience. As recent global supply chain disruptions have shown, securing stable access to key raw materials and components that are heavily dependent on overseas sources is increasingly critical. Korea must boost domestic production capacity for these essential materials while also diversifying and adding flexibility to its global supply chain network.

Ultimately, the key to overcoming a 히어로토토 era lies in strategic adaptability and forward-looking innovation. Korea must respond wisely to these changing global dynamics to ensure sustainable growth and global competitiveness.