Chapter 251
Chapter 251
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Translator: crow
Chapter Title: Trade War
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Despite all sorts of side effects, the currency war had opened up some breathing room for Korean exports, which had been choking under skyrocketing exchange rates.
Korean goods poured back into world markets, seizing the opportunity from the plummeting exchange rates.
Kennedy watched this unfold and toyed with the idea of tariffs, but he couldn't act rashly after last year's price shock.
"Sanctions? Don't even think about it."
In fact, Korea had been working behind the scenes to tie the hands of the U.S. government.
"This currency war was a defensive measure against speculators' games. Pyongyang never even considered impoverishing its neighbors."
"Still, Wall Street's buzzing about it."
"Congressman, think about it. If you slap tariffs on Korea using this as an excuse, Europe could hit the U.S. with the same logic."
That was exactly right.
The U.S. itself had unilaterally devalued its currency by abandoning the gold standard.
I spread this logic around to keep them from pulling the sanctions card.
At the same time, I subtly catered to the Republicans.
"Help us get past this, and we'll assist in bringing a Korean factory to your district."
Jobs, agricultural purchases, tariff reductions.
I pulled out every card I had to block U.S. sanctions.
That barely managed to quash the talk of sanctions the U.S. had been itching to unleash.
Did that settle everything?
Not even close.
The U.S. seized on the shaken confidence in the won to rapidly advance discussions on the petrodollar.
'No way in hell.'
Petrodollar or not, I wasn't about to let the U.S. gobble up oil unchecked.
"The won may have wobbled, but under floating rates, fluctuations like this are par for the course. Even factoring in the currency war volatility, the won's more stable than the dollar."
I sent our foreign minister and deputy prime minister to the Middle East to tout Korea's stability.
"But didn't Korea deliberately devalue the won? How can we trust it won't happen again?"
"I promise you this: if the exchange rate drops further, the Korean government will cover your losses, even at a cost to ourselves."
Of course, I was making that promise because I was certain the rate wouldn't drop any lower.
What if it did anyway?
Then we'd sell dollar assets to prop up the won.
As the world's top holder of net foreign assets, Korea had the power to dictate the won's ups and downs.
"You're that confident? We'll give it a shot."
We hustled to soothe the oil sheikhs.
The U.S., naturally, wasn't sitting idle.
"Talks in Saudi seem nearly wrapped up."
"If we can't stop the petrodollar from taking hold, we at least need to ensure Korea and EA trades stay in won."
"We'll do our best."
We wined and dined key players like the oil minister, stuffing them with bribes.
'Western transparency? Great in theory. But sometimes opacity leaves more wiggle room.'
The money we shoveled out paid off.
"Don't worry. Even if the petrodollar sticks, petro-won trades with EA won't vanish."
That's how we defended the petro-won system.
But the currency war's waves didn't stop there.
"Your Excellency, the EEC has declared higher tariffs on our finished goods."
"Didn't we show those Europeans some goodwill? I thought we'd cut our tariffs on them as a courtesy. Am I misremembering?"
"Looks like they're using this as an excuse to squeeze out Korean market share."
These guys— we'd bowed our heads to play nice, and they thought we were suckers.
The U.S. was one thing, but I wasn't letting Europe push us around.
"How much are they slapping on our goods?"
"30% as retaliation for the won devaluation."
I racked my brain for ways to hit Europe back.
Truth be told, if I wanted to, I could choke them out in a dozen ways.
"What if we threaten to restrict semiconductor materials and equipment exports?"
"Absolutely not."
Semiconductors must never be weaponized, no matter what.
Simple reason.
If we threatened supply even once, they'd hit back hard.
Whether they ramped up self-sufficiency or shifted suppliers, retaliation was inevitable.
Even Japan had tried sanctioning Europe on semis, lost market share, and got an earful.
I wasn't dumb enough to repeat Japan's flop.
So sanctions couldn't squeeze supply.
"What about chemicals?"
"Restricting machine tools would gut their industry."
Same problem as semis—self-inflicted wounds.
I brushed off the bureaucrats' sanction pitches.
"Stick to the playbook. We raise retaliatory tariffs on Europe too."
With EA's market size, why go off-script?
Europeans sold plenty into our market.
Who'd crack first if trade ground to a halt?
I announced tariff retaliation.
"If Europe imposes tariffs worth $5 billion, we'll hit them harder."
Like Trump, I blasted the sanction list through the press.
And there was good reason for the bravado.
Dragging out a Korea-Europe trade spat hurt the EEC more.
Our exports to them dwarfed theirs to us, and we sold irreplaceables like semis.
Could Europe cut themselves off from that?
If we exempted irreplaceables and sanctioned the rest, Europe couldn't out-escalate us.
They knew it too.
"Pyongyang can bluster all it wants—we won't back down. Hang more tariffs on our goods, and we'll expand our list."
Still pushing? Probably hoping we'd blink out of fear of the U.S.
America was the root of Europe's sanction confidence.
But they were dead wrong.
Sure, we feared the U.S., but not enough to cower at its shadow.
"Yeah, bring it. We're ready."
Pyongyang was geared up to go the distance with Europe.
"They're doing it. For real."
Europe started growling like it was chicken all the way, but hesitated when it came to sanctioning semis and such.
We had no qualms hitting European goods.
"French farm produce? Quality stuff, but Korea starves without it? German sausages, Spanish pork—sanction 'em all."
In just a month, we'd flipped the sanction scale, outpacing Europe.
"Whoa, hold up."
"We've got plenty left on the list. About 500 items—your thoughts?"
We could survive cutting Europe off entirely.
But them?
Compared to our industrial position—China, Japan, Korea, Taiwan, and Germany combined.
No buy our stuff?
Got alternatives?
"……."
"Keep sanctioning if you can take more."
We took a hard line to set an example.
Then the EEC backchanneled this:
"Mutual sanctions hurt everyone economically. Call it a draw here?"
Ridiculous.
We made clear: no compromise till they surrendered.
"Can't we just talk this out nicely?"
Nope.
You're the example proving defiance means your face in the dirt.
We held firm.
After a month, Europe threw in the towel.
"We'll fully withdraw special tariffs on Korea."
The EEC pullback was surrender in all but name.
We reciprocated by lifting our tariffs on European goods.
"Behave from now on."
Europe dubbed the Pyongyang talks the "Humiliation of Pyongyang."
"Europe united, and we couldn't take down little Korea. Shameful."
'Told you not to pick a trade fight with us.'
Only one nation on Earth could sanction Korea: superpower America.
Everyone else lacked the chops and the right.
Victory in the Europe trade war reaffirmed the won's prestige amid the wobble.
"The won's the won. Korea's the country even Europe can't sanction—the monopoly goods powerhouse."
The spat showcased Korea's edge to outside eyes.
Not ideal, of course.
"Look at them. Korea's economically crushing Europe solo. Not scarier than the Soviets?"
Anti-Korea voices surged beyond measure.
Even Republicans warmed to containment talk.
Kissinger fretted the Korea-Europe clash could replay as Korea-U.S., urging haste.
"We need to act fast. Even now, checking Korea feels late."
Cold War diehards started listening to "maybe check Korea?" murmurs.
Bad vibes for us.
"How's the PR push going?"
"Highlighting Red threats in U.S. media nonstop. But..."
"Not landing, huh."
Cold War fever couldn't last forever.
Soviets weren't the threat to U.S. pols anymore.
It was Korea, the economic giant risen too fast.
And this year? 1964.
Election year.
If Korea-bashing trended in the race, it could become policy.
I felt the urgency to move before things tangled worse.