In a significant move to counter the growing economic pressures from U.S. tariffs, China, South Korea, and Japan agreed on Sunday to bolster their free trade efforts and accelerate negotiations for a trilateral trade agreement. This agreement comes in the wake of U.S. President Donald Trump’s impending tariffs on a broad range of imports, including cars, trucks, and auto parts, set to take effect in just a few days.
South Korea and Japan, two major auto exporters, alongside China, which has been severely affected by the U.S. tariffs, have formed a united front to address the escalating trade tensions. The meeting, the first of its kind in five years, included South Korea’s Industry Minister Ahn Duk-geun, Japan’s Trade Minister Yoji Muto, and China’s Commerce Minister Wang Wentao.
The three countries stressed the importance of speeding up their negotiations for a comprehensive free trade agreement and committed to creating “a predictable trade and investment environment.” Ahn highlighted the need for a joint response to shared global economic challenges, noting the increasing fragmentation of the global economy.
“The international environment surrounding us is constantly changing, and uncertainties are increasing,” said Japanese official Yasuji Komiyama in a press briefing. Meanwhile, Chinese official Wang Liping warned against the rise of “unilateralism and protectionism,” stressing that the three nations must take responsibility for preserving the multilateral trading system.
The three countries, collectively representing 20% of the world’s population, 24% of the global economy, and 19% of global merchandise trade, are determined to safeguard global trade stability amid growing protectionist policies. Ahn, from South Korea, emphasized that protectionism was “not the answer” and underscored the need for the World Trade Organization to function effectively in maintaining the stability and predictability of international commerce.
This move comes as President Trump is set to implement tariffs targeting individual trading partners, starting April 2, as part of his efforts to address what he considers unfair trade practices. However, Trump has also indicated some flexibility, offering a degree of relief to markets toward the end of last week.
Following the trilateral meeting, the three ministers also held bilateral discussions. Japan’s Muto remarked that, despite any political challenges between the countries, continued cooperation and exchange were essential. He emphasized that energy and securing critical minerals were key issues, highlighting the importance of economic collaboration despite potential diplomatic hurdles.
Japan and South Korea have long been embroiled in historical disputes, particularly over Japan’s use of forced labor during its occupation of the Korean Peninsula. These tensions worsened in 2018 when South Korea’s Supreme Court ordered Japanese firms to compensate victims of wartime forced labor, leading to a series of retaliatory measures. Despite these historical challenges, Muto stressed the need for uninterrupted social and economic activities to ensure smooth operations for businesses.
Experts predict that the U.S. tariffs, especially on automobiles, will significantly impact both Japan and South Korea, as they rely heavily on exports to the U.S. Ahn expressed concerns that the tariffs could severely damage South Korea’s automobile industry, with 50% of the country’s car exports directed to the United States. Similarly, Japan, home to the world’s largest carmaker, Toyota, faces risks to its auto industry, which plays a critical role in various sectors, including parts manufacturing, steel production, and microchip development.
In this context, the trilateral agreement represents a critical step toward preserving trade stability in the face of growing protectionism and global trade uncertainty.
