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KAUPA Letters

KAUPA Letters

DOI

10.5703/1288284318458

Abstract

Korea stands at a pivotal crossroads in global trade, caught between the twin forces of rising protectionism and the emergence of a multipolar economic order. Once a major beneficiary of U.S.-led free trade, its export-driven growth thrived under predictable rules and open markets. That stability is now eroding as the United States shifts toward protectionism—driven by mounting debt, persistent trade deficits, and the burdens of overextended global commitments—through tariffs, reshoring incentives, and strategic restrictions on key sectors like steel, semiconductors, and electric vehicles. These measures have disrupted Korea’s supply chains, complicated market access, and heightened uncertainty, even as China’s economic diplomacy, BRICS expansion, and regional trade agreements present new opportunities and risks. Korea’s long-term competitiveness is further challenged by demographic decline, political polarization, and the erosion of trust in traditional alliances. This study argues that Korea must now steer decisively between two strategic paths: one of delayed adaptation marked by internal division and economic strain, and another of accelerated renewal through consensus, diversification, and proactive alliance management. The choices made in the coming years will determine whether Korea merely adjusts to a fragmented trade order or helps shape the architecture of the next global economy.

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