Beef Trade War: US, China & Global Impact | Steven Altman

With the rise of geopolitical tensions and conflicts, leaders in each country are in a situation where they need to re -establish their strategic positions in the world of more complex and unstable world order. Korea, which has a close relationship with both the United States and China, has a particularly influence. In this context, it is essential for policy decisions to identify Korea’s international exchange status as the latest data. Related data suggests that Korea should not only focus on the US -China relations, but also to create a national strategy in a wider field of view.

The Global Connected News Tracker, co -authored with the Caroline Bastian Researcher at the Stunmun Business School of New York University, is a report that regularly analyzes the international trends of the world in various areas. In order to evaluate the international exchange of the countries from a geopolitical perspective, the report utilizes the geopolitical category system developed by Capital Economics. All countries except the United States and China are classified as one of the following five categories. ▷ US Close Allies ▷ Leans US ▷ Unaligned ▷ Leans China ▷ CHINA Close Allies.

The graph in this column shows how Korea is doing international exchanges with the geopolitical category, based on eight sectors including international trade, investment, and research cooperation. In addition, the data was also presented in 2016 for comparison, before the US -China trade war was in full swing before the launch of the Trump 1st administration, and before the deployment of the THAAD (THAAD) and the economic relationship between Korea and China. This data allows you to derive the following four implications:

First, South Korea is traditionally more active than the United States or China, and is much more active with countries that are geopolitical and pro -American. Based on the simple average of all international exchanges presented in the graph, 45%of Korea’s international exchanges were made with the US core allies and pro -American countries in 2024 (or the latest data). This is much higher than the proportion of exchanges with the United States (27%) and exceeds the interaction between asynchronous vouchers (10%), China (10%), China’s core allies and pro -affiliated countries (8%).

If so, what kind of country will the US core allies and pro -American countries, which account for almost half of Korea’s international exchanges? This category includes major economies in Western and Central Europe, as well as major economies in Asia -Pacific, including Japan, Vietnam, Australia, Taiwan and India. All of these countries have a particularly strong connection with Korea.

Second, in all areas except commodity trade, Korea has much more interaction with the United States than in China. The biggest gap is in the portfolio investment sector, including corporate stocks. Korea’s portfolio investment in the United States is 28 times larger than China. This difference is also clear in international corporate investment. In 2024, Korean companies announced the Greenfield FDI project, which were directly established and invested in production facilities or corporations in the United States, eight times higher than in China, and the number of M & A in the United States was six times higher than in China.

Product trade, on the other hand, is an exception in this trend. Looking at the data from January to November 2024, Korea’s exports (20%) and US exports (19%) are similar, but imports from China are 22%, nearly twice as high as the US (12%). This trade structure is not limited to Korea. This shows that China has a high proportion of product trade compared to other international exchange sectors. In fact, as of 2024, China accounts for 13%of worldwide product trade, becoming the world’s largest trade country. However, the proportion of China in non -commodity trade is much lower, and the share is no longer increasing in the trade sector. China’s steep growth has stopped about 10 years ago.

Third, Korea’s international exchange is moving from China and its allies to the US and its allies. On average, in 2016, Korea’s international exchanges were 68%of the US, Core Friendship Allies, and Friendship countries, but increased to 72%in 2024 (or latest data). On the other hand, the share of China and its allies decreased from 25%to 17%over the same period.

However, international joint research shows exceptional flow. The proportion of scientific research papers co -written by Korean researchers with Chinese and its allies researchers increased from 18%in 2016 to 27%in 2024. The biggest factor is that cooperation with Chinese researchers has increased significantly. This phenomenon is common in other countries. As China has emerged as a world leader in various research and technological innovations, many countries are rapidly increasing their share of cooperation with Chinese researchers.

Fourth, the fastest growing area in Korea’s international exchanges is geopolitical interaction with asynchronously. The proportion of international exchanges with asynchronous countries such as Indonesia, Malaysia, the UAE and Brazil increased on average from 7%in 2016 to 10%in 2024.

This is in line with the overall trend of countries that take more flexible geopolitical stance in world trade. In many cases, these countries serve as an intermediate hub of supply chains among countries in geopolitical competition. Many countries with the fastest increase in trade in recent years are not the core allies of either the US and in the US, but are partially enhanced countries on either or one or one side. Vietnam is a representative case. Vietnam, which is classified as a pro -American country based on capital economics, has recently increased its imports from China and exports to the United States. However, US policy officials are trying to reduce indirect dependence on Chinese products, and China is also strongly opposed to this, so it is uncertain whether this role will continue in the future.

What kind of implications can Korean companies and policy makers come to this trend? As an American scholar who studies the flow of international exchange, my role is to convey this information more easily. Of course, Korean policy makers will know much better than me. Nevertheless, I would like to add the following three suggestions to be a reference.

First, we need to look at the US -China conflict in a wider world context. The United States and China are the world’s largest economy, but either is absolutely absolutely enough to influence the flow of international exchange alone.

It is especially noteworthy that the largest part of the global economy and the largest part of Korea’s international exchange is the United States, excluding the United States. In a period of uncertain US policy directions as it is now, cooperation with these countries can be more important than ever.

Second, geographical elements are still important. ‘Death of Distance’ is only a myth. The nations are still more active with neighbors who are closer than far countries. Therefore, when analyzing international exchange from a global perspective, it is necessary to consider the regional context of each country. In the case of Korea, we need a regional point of view that focuses on neighboring countries such as China and Japan, but expands the view to ASEAN and South Asia.

Third, it is necessary to have a short and long term. Companies have many challenges to respond to trade volatility, such as customs clearance regulations, ordering and shipping schedules, and the management of funds. But in the meantime, we should not miss the long -term change in the world order. In the next decades, the world is expected to be more polarized, and South Asia, Southeast Asia, and Africa will continue to grow in the global economy. In this context, cooperation with Southeast Asia and South Asian countries will be more important for Korea.

All three suggested suggestions emphasize that the view of a bigger picture is needed to go through the US -China conflict phase. Korea is faced with extraordinary challenges under special geographical and historical conditions. However, if you look at international exchange data, you can see that Korea’s direction is to see the world where the US -China competition is larger and more polarized. The future of Korea will be unfolded in that multiple world.

Korea’s Big World Beyond U.S.-China Rivalry

Geopolitical tensions and conflicts are forcing leaders to rethink how they position their countries and companies in an increasingly complex and turbulent world. This challenge is particularly acute for leaders in Korea, a country with especially close ties to both the United States and China. In this context, an up-to-date view of Korea’s international activity is essential for informed decision-making. The data suggest taking a broad approach, looking well beyond only Korea’s ties with the U.S. and China.

The DHL Global Connectedness Tracker, which I co-author with my NYU Stern colleague Caroline Bastian, provides a regularly updated view of countries’ international ties across a wide variety of areas. To assess countries’ international activity from a geopolitical perspective, we use a classification of countries’ geopolitical alignments that was developed by Capital Economics. Apart from the U.S. and China, every country is classified into one of the following five categories: U.S. Close Allies, Leans U.S., Unaligned, Leans China, and China Close Allies.

The chart that accompanies this column shows how much of Korea’s current international activity is with countries in each of these categories, considering eight aspects of international trade, investment, and research collaboration. It also provides, for historical comparison, the same data for 2016, before the start of the U.S.-China trade war during the first Trump Administration and the major disruptions to Korea-China business ties that followed the deployment of the THAAD missile defense system. Four key messages stand out from these data:

First, Korea interacts far more with U.S.-aligned countries (not the U.S. itself but other countries that have traditionally been aligned geopolitically with the U.S.) than it does with either the U.S. or China. Taking a simple average across all of the types of international activity shown on the chart, the 2024 (or most recent available) data show 45% of Korea’s international activity involving countries in the U.S. Close Allies and the Leans U.S. categories, far more than the 27% with the U.S. itself, 10% with Unaligned countries, 10% with China, and 8% with countries in the China Close Allies and Leans China categories.

Which are the main countries in the U.S. Close Allies and Leans U.S. categories that jointly account for nearly half of Korea’s international activity? Countries in these categories with especially large ties to Korea include all major economies in Western and Central Europe, along with major Asia-Pacific economies such as Japan, Vietnam, Australia, Taiwan, and India.

Second, in all areas except trade in goods, Korea has much larger ties to the U.S. than to China. The largest discrepancy is in portfolio equity investment (which includes company stocks). Korean investors hold 28 times more portfolio equity investment in the U.S. than in China. But there are also large discrepancies in international business investment. Korean companies announced 8 times more greenfield foreign direct investment projects (opening or expanding operations) in the U.S. than in China in 2024, and Korean buyers announced 6 times more M&A purchases in the U.S. than in China.

Trade in goods, however, is an important exception to this pattern. In 2024 (January to November), roughly equal shares of Korea’s exports went to China (20%) and the U.S. (19%), and a much larger share of Korea’s imports came from China (22%) than the U.S. (12%). This pattern is not unique to Korea. Instead, it reflects China’s unusually large position in trade relative to other kinds of international activity. China is, by far, the largest participant in global trade in goods (13% share of global goods trade in 2024). But beyond trade, China’s share of other types of international flows is much smaller. And even in trade itself, China’s share is stable rather than rising. Its rapid rise ended about a decade ago.

Third, Korea’s international activity has shifted toward the U.S. and its allies and away from China and its allies. On average, the share of Korea’s international activity involving the U.S., U.S. Close Allies and countries in the Leans U.S. category rose from 68% in 2016 to 72% in 2024 (or most recent year available), while the equivalent share for China and China-aligned countries fell from 25% to 17%.

International research collaboration, however, is a notable exception. The share of scientific publications that researchers based in Korea co-authored with researchers in China and China-aligned countries soared from 18% in 2016 to 27% in 2024, with the largest factor being more collaboration specifically with researchers in China. This is a common pattern for many countries. As China has emerged as a leading country in many fields of research and innovation, the share of many countries’ research involving collaboration with Chinese partners has increased sharply.

Fourth, the fastest growth in Korea’s international activity involves countries that are Unaligned geopolitically. On average, the share of Korea’s international flows involving Unaligned countries such as Indonesia, Malaysia, the United Arab Emirates, and Brazil rose from 7% to 10%.

This fits with the broader phenomenon of countries with more flexible geopolitical alignments growing their shares of world trade, and in many cases playing intermediate roles in supply chains that connect geopolitical rivals. Many of the countries with the fastest recent trade growth are close allies of neither superpower, remaining Unaligned or only Leaning toward one side or the other. Vietnam (classified by Capital Economics as Leans U.S.) is a prime example, with large recent increases in imports from China and exports to the U.S. The viability of such intermediate positions moving forward, however, remains unclear, as U.S. policymakers seek to cut such indirect dependencies on goods from China – and Chinese leaders resist such efforts.

What do these patterns imply for Korean business and public policy? As a U.S.-based scholar of global patterns of international activity, I see my main role as providing convenient access to this type of information. Korean decision-makers know far better than I do the advantages and disadvantages of alternative actions. I would merely propose three considerations for them to keep in mind:

First, consider U.S.-China tensions in global context. The U.S. and China are the world’s two largest economies, but neither is large enough to unilaterally determine global patterns of international activity. I find it striking that the largest part of the world economy – and also the largest partner for Korea’s international flows – is U.S.-aligned countries (excluding the U.S. itself). During the present period of high uncertainty about U.S. policies, collaboration across this group of countries could be especially valuable.

Second, remember that geography still matters. The “death of distance” is a myth – countries continue to interact much more intensively with their neighbors than with distant countries. So, analysis in a global context should always pay special attention to the position of any country within its own region. For Korea, a regional perspective can devote particular focus to immediate neighbors (especially China and Japan) while incorporating a wider view of regional ties that extends through the ASEAN countries all the way to South Asia.

Third, think over multiple time horizons. Companies must attend to near-term challenges posed by today’s trade turbulence, ranging from customs compliance to managing cash flows amid rapid changes in orders and shipping schedules. It is essential, however, not to lose sight of long-term shifts, which suggest that the world will become even more multipolar in the coming decades, with South Asia, Southeast Asia, and Africa growing their shares of the world economy. In this context, Korea’s ties to Southeast and South Asia are likely to be especially important.

These three suggestions all highlight the importance of a bigger-picture perspective for managing U.S.-China tensions. Korea’s position in the world-with its unique geography and history-presents special challenges. But data on Korea’s international flows suggests the value of a mental map of Korea’s world that reaches well beyond U.S.-China rivalry – to the much bigger and increasingly multipolar world in which Korea’s long-term future will unfold.