The year 2024 is the year of the U.S. presidential election. Based on the results of the primaries so far, the Republican candidate is effectively confirmed to be former President Trump, and the Democratic candidate is current President Biden, making the 2024 U.S. presidential election a rematch of the 2020 election. This study examines the background of Trump’s tariff policies and estimates the economic effects of scenarios.

The theoretical background of U.S. tariff policy can be attributed to a so-called ‘beg-gar-thy-neighbor’ approach. In reality, policy makers consider economic, trade policy, and political factors. Based on the confirmed tariff policies from the Trump campaign, the tariff imposition levels are divided into three categories: (1) Universal tariffs (10%p), (2) Application of Section 301 (25%p or 60% to China), and (3) Reciprocal tariffs (based on the tariff rate difference between the U.S. and its counter-part). The target countries are segmented into (1) FTA signatories, (2) Non-FTA signatories, and (3) China. Additionally, two cases were analyzed, (1) Unilateral tariff imposition by the U.S. and (2) Implementation of retaliatory tariffs by its counterpart, making a total of ten scenarios.

The U.S. trade balance could improve by $171.5 billion to $315.3 billion depending on the scenarios. On the contrary, additional tariffs imposed by the U.S. are expected to have a negative impact on the U.S. economic growth in all scenarios. The adverse impact on consumer prices is expected to be significant. Depending on the scenario, Korea’s total exports are forecasted to decrease by $5.3 billion to $24.1 billion.

According to the analysis in this study, U.S. tariff policy could potentially improve the U.S. trade balance depending on the scenario, but this may be a short-term effect. Also it is inferred that the additional tariffs imposed by the U.S. may ultimately have the same impact as simply increasing the tax burden on U.S. consumers. More importantly, the tariff war could in-crease inflationary pressure in the U.S. unlike in the past. Expanding tariff imposition by the U.S. to include its FTA partners requires a cautious approach. It could significantly increase inflationary pressure on the U.S. consumer prices. moreover, there is a possibility of legal disputes, which could destabilize relationships between the U.S. and its allies.