Ha-Joon Chang, professor of economics at the School of Oriental and African Studies (SOAS) in the U.K., speaks during a video interview with the Kyunghyang Shinmun on April 4. Reporter Lee Jun-heon

As the world reels from U.S. President Donald Trump's “tariff war,” Ha-Joon Chang, professor of economics at the School of Oriental and African Studies (SOAS) in the U.K., advised that Korea needs to develop a "strategy to get away from the U.S.”

In video and phone interviews with the Kyunghyang Shinmun on April 4 and 11, Chang said, “The U.S. measures, such as reciprocal tariffs, will make other countries think of a ‘global economy without the U.S.’ in the long run.” Despite Trump announcing a 90-day pause on all the reciprocal tariffs, Chang asserted, “Trust has already been broken,” and added, “The U.S. has crossed the Rubicon.” Chang is a world-renowned Korean economist known for critiquing mainstream economics and the hypocrisy of Western capitalism.

He particularly emphasized the need for South Korea to adopt a national strategy to reduce dependence on the U.S. He also suggested that Korea should rethink its negotiation strategy, which is centered on appeasing Trump. “The Korean government’s mindset still seems stuck in the era when its per capita income was only $1,000. All they worry about is how not to upset the U.S.,” said Chang. “Given how the U.S. is acting, it makes no sense to keep saying, ‘What else can we get you?’” The following is an excerpt from the interview.

- On April 2 (local time), President Trump announced tariffs of up to 50 percent on 57 major trade partners (25 percent on Korea). Though he later declared a pause, he did not retract the plan. What is your view on this announcement?

“It’s a comedy, plain and simple. Without importing cheap and good-quality goods from abroad, the current U.S. economic system can’t function. Real median wages in the U.S. have barely risen since the 1970s. The system of suppressing wages to boost corporate profits, buy back their own shares, and give astronomical salaries to CEOs was made possible only because the U.S. could import consumer goods cheaply. After benefiting from this, American elites now claim that trade partners ‘stole from them.’ Let's say I have a favorite restaurant in my neighborhood that I frequently visit because it tastes good and the price is reasonable. My relationship with the restaurant is that I've given money to it. Trump's behavior is like I suddenly show up at the restaurant and say, ‘You've been robbing me.’ That’s essentially what Trump is doing.”

- The U.S. says it wants to revitalize U.S. manufacturing by raising tariffs.

“Broadly speaking, what Trump is talking about resembles infant industry protection, a strategy that temporarily protects an industry, which is like a child, until it becomes internationally competitive. He's saying he’s going to create breathing space with tariffs so firms can invest, improve productivity, and then compete later. I once used an analogy of my son. Sending a six-year-old son out to work might help me now, but sending him to school means he might become an architect or a doctor in the future. But Trump is talking about giving money to a fully grown son who has been slacking off and partying instead of running his business. And it is not just a metaphor. The U.S. financial system has become parasitic. U.S. companies used to reinvest 50 percent of their profits in the 1960s and 70s. Now, under strong shareholder pressure, they pay out high dividends and even borrow to buy back their own shares. They are returning 90 to 95 percent of their profits to shareholders. U.S. companies simply don’t have the capacity to invest anymore.”

- What if foreign companies build factories in the U.S. and create jobs?

“The U.S. has destroyed its industrial base over the past 40 years. Unless other countries take everything out (of their countries) and rebuild it in the U.S., the problem of the U.S. manufacturing that Trump has been claiming cannot be solved. Korea also needs to be careful that it does not try to match Trump's strategy and end up hollowing out of the domestic manufacturing industry.

- What strategy should Korea take? Hyundai Motor Group has recently announced a 31 trillion won investment in the U.S.

“Now it’s difficult to do anything with the U.S. through proper legal procedures. If I were a businessperson, I wouldn’t invest in the U.S. These moves by the U.S. will, in the long run, prompt countries to envision a ‘world without the U.S.’ and a ‘global economy without the U.S.’ While it’s a stretch to talk about forming an economic community, there will definitely be more cooperation among non-U.S. countries.”

- Can another country take over the role of the U.S.?

“There doesn’t have to be a single hegemon. The U.S. is less important in international trade than people think. The U.S. economy is large and domestically driven. While it accounts for about 25 percent of global GDP, its share of global trade is only around 10 percent. Trump is treating allies harshly saying, ‘Allies are worse than enemies,’ but they can't change (their export structure) overnight, so they will succumb immediately, but in the long run, they will think, ‘Well, we might as well stop selling to the U.S.’ For Korea, sectors like semiconductors, cars, and shipbuilding are tied to the large U.S. market, so pulling out completely is difficult. But overall, reducing reliance on the U.S. is a smart move. How can you do business in a country that might suddenly flip and change its policies?”

- Trump declared a “90-day pause” on all the reciprocal tariffs 13 hours after they went into effect. Even if the tariffs are rescinded, should Korea pull out of the U.S.?

“Pulling back doesn’t mean reducing Korea’s U.S. export share from some 20 percent to zero. What I want to say is reducing its dependence on the U.S. as much as possible because the U.S. has become an unpredictable country that has abandoned the rule of law. Trump might reimpose reciprocal tariffs a month later if he feels it suits him. Even if the U.S. says, ‘Let’s forget it ever happened because we were wrong,’ the trust is already broken. But the U.S. hasn’t even said that. I believe the U.S. has crossed the Rubicon.”

- So should Korea stop obsessing over negotiations with the U.S.?

“Negotiations must be backed by a clear strategy. Without one, dealing with Trump could be disastrous. It’s like giving a rice cake to a tiger hoping not to get eaten, only to be eaten anyway. The Korean government’s mindset is stuck in the era when its per capita income was only $1,000. All they care about is not upsetting the U.S. I don’t think Koreans realize how big and important their country has become. It’s the 12th-largest economy in the world. They shouldn’t go to the U.S. and say, ‘What else can we get you?’”

- How will Trump’s tariff war affect global trade order?

“The U.S. has an unfounded confidence that others will eventually submit to them. But not all countries will feel the need to do so. Many countries will start acting differently from a long-term perspective. So we don’t yet know exactly how global trade order will shift. Some die-hard free trade advocates claim that if the U.S. starts raising tariffs, others will follow, causing a collapse like the Great Depression. But tariffs were a secondary issue then. The Depression worsened because of economic crises in individual countries that dried up demand and trade financing. We’re not in that kind of crisis now, so global trade won’t collapse that easily.”

- Four months after the martial law declaration on December 3 last year in Korea, the sitting president was impeached. What were your thoughts?

“Watching the Constitutional Court deliver its ruling on the impeachment case, I felt relieved, thinking ‘Democracy is still alive in Korea.’ But as an economist, I’m worried about what comes next. After former President Park Geun-hye was impeached, citizens brought in the Moon Jae-in administration. But why did they later choose former President Yoon Suk-yeol? It’s because the government led by the Democratic Party of Korea failed to implement policies that enhanced citizens' well-being. It was caught up in the conservative fiscal management claims of fiscal bureaucrats, and while it didn't push for deregulation and tax cuts, it was constantly drawn into the neoliberal discourse. I am very worried because I don't want to see that happen again in the new government. I hope that the new government will not repeat that failure."