For the U.S., such a lowering of security and political tensions could create an opportunity to plug a seemingly unstoppable $467.2 billion hemorrhage on trade accounts with China, Japan and South Korea.
So far, some progress has only been made with South Korea. Last year, the trade deficit with Seoul narrowed 17 percent, an excellent trend that continued with a 24 percent decline in January of this year. A large part of this progress was achieved thanks to a 14 percent increase in American exports to South Korea during 2017, and a further 9 percent annual increase last January.
That is exactly the kind of trade dynamics the U.S. should seek in its quest for more balanced trade accounts. In the particular case of South Korea, a growth impetus from a peaceful and cooperative relationship with the North would expand export markets for American products and services.
China would be another beneficiary of its stable and rapidly developing Korean neighborhood. But it remains to be seen how the U.S. can use that to stop and reverse its soaring trade deficits with the world’s second-largest economy.
In spite of Chinese pledges of a “win-win cooperation,” Beijing’s trade surplus with the U.S. increased 8 percent last year to an excessive $375.2 billion. Things got worse at the beginning of this year. There was no increase in American export sales to China last January, but the deficit increased 15 percent from the year earlier and ran at a whopping annual rate of $432 billion.
How will the U.S. square the circle of cutting its deficits with China and challenging the Chinese maritime borders while relying on Beijing’s help to reach a peaceful resolution of the Korean armistice, where nuclear weapons and ballistic missiles serve as guarantees for the survival of North Korea?
And here is an equally intriguing question: Does China realize that its huge, and growing, trade surpluses with the U.S. are economically and politically intolerable?
And then there is Russia. Will the U.S. stand idly by as its close allies Japan and South Korea run big business with Russia via their “8 and 9 bridges” pledged by Japan’s Minister Shinzo Abe and South Korea’s President Moon Jae-In at the Vladivostok Eastern Economic Forum last September? Would American businesses be simple observers of multi-billion transactions, while the Koreans and the Japanese pocket the money and America continues to bleed on trade and military outlays to provide their defense umbrella?