Chapter 295
Chapter 295
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Translator: crow
Chapter Title: Chapter 295 - 경제 전쟁
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Translator: crow
Chapter 295: Economic War
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Ordinary people weren't sensing the confrontation between America and Korea, but policy officials clearly recognized the rivalry between the two superpowers.
Even so, trade between the two countries continued without a hitch.
Korea was still raking in massive profits by selling huge volumes of goods to the First World market.
This was the biggest difference that set it apart from the old Cold War and the new one.
It bore a similarity to the US-China rivalry in the original timeline.
‘But holding the same position as China in the original timeline and competing with America would be foolish.’
If they gave Washington time, it would slowly drive Korea out of the market.
Yi Seong-jun clearly remembered the isolation strategy Biden had used against Xi Jinping.
If they gave America the leeway to isolate Korea with its overwhelming market and national power, they couldn't win the hegemony race.
‘In that case, it's better to launch the offensive before Washington can touch our market dominance.’
Once Yi Seong-jun finished his calculations, he decided to kick off an economic war against America.
“Semiconductors would be a good place to start.”
Yi Seong-jun explained to his bureaucrats a strategy to attack America's electronics industry using semiconductors.
The key was semiconductor dumping.
Yi Seong-jun planned to start the economic war with America through semiconductor dumping.
“Have the economic ministries coordinate with Sesung to prepare for semiconductor dumping.”
“We shall obey.”
Just as Yi Seong-jun had outlined, Sesung dropped the shipping price of transistors by 30% starting in early February.
America's semiconductor companies began screaming at this shocking dumping.
“The Koreans are trying to kill us all in a chicken game. Are we just going to sit here and watch?”
“If this keeps up, we're all dead. At least raise the tariff barriers!”
Faced with American semiconductor firms yelling for it to do something about the dumping, the US government was tearing its hair out.
If semiconductors were just any ordinary industry, Washington wouldn't have agonized so much, but this field was directly tied to national defense and security tech—America's core industrial sector.
“We need to slap anti-dumping tariffs on Korean semiconductors first.”
“Korean semiconductors won't be stopped by slapping on a reasonable anti-dumping tariff. Our companies can't compete with them on economies of scale.”
“Then what do you suggest?”
“We have to negotiate with Pyongyang.”
The US government hastily set up talks with Korea.
There, America proposed a "Semiconductor Agreement" to cap Korea's semiconductor exports to the US.
In summary:
“Leave some bowls for our kids to eat from. Our companies need to take 40% of our market.”
The US government begged Korea to make concessions.
Korea didn't even snort at America's demand.
“And if we don't?”
“Then we'll raise anti-dumping tariffs to 500%.”
They'd hike the current 10% tariff to 50%.
“Go ahead and try.”
Korea was confident.
Imposing 500% anti-dumping tariffs was basically the same as giving up on cheap Korean semiconductor supplies.
The ripple effects would immediately hit the finished products of electronics firms.
“Why have radio and TV prices shot up like this?”
“Semiconductor supply costs have gone up.”
“This is ridiculously expensive. How are we supposed to buy this crap?”
The sanctions did improve the profitability of American semiconductor companies, but the damage to American electronics firms was several times worse.
They were even falling behind European companies in price competition.
American electronics companies felt their blood draining day by day amid this market situation.
The US government wasn't blind to it.
“But if we let this slide, our semiconductor companies will all die in the Koreans' chicken game.”
It was a classic dilemma of death.
Save the electronics companies, or save the semiconductor ones?
While America floundered, Korea launched a second strike against American semiconductor firms.
“What? Korean semiconductor material prices have gone up 300%?”
“There was a fire at our factory, so we had no choice but to raise supply prices. We ask for your understanding.”
Korea jacked up semiconductor material prices with all sorts of excuses.
At the same time, it kept domestic Korean supply prices steady, claiming to supplying factories that there were no issues.
“If you keep this up, we'll have no choice but to produce our own materials.”
The US government rushed countermeasures, but the items Korea was choking off weren't just one or two.
“We're facing strike issues that could delay semiconductor equipment deliveries.”
Even as America tried to counter Korea's offensive, Pyongyang's share in semiconductors was just too dominant.
Korea wielded that share freely, denying American semiconductor plants any chance to run properly.
Maintaining the "dumping" pressure on top of this left American semiconductor companies utterly defenseless.
“You're retaliating like this against our anti-dumping tariffs?”
America saw Korea's response as payback for their own anti-dumping tariffs.
America pulled out its own retaliation cards against Korea.
“We'll impose anti-dumping tariffs on Korean TVs, radios, and computers.”
“Bring it.”
Korea didn't care.
Considering the semiconductor supply headaches burdening American electronics firms, Korean companies still held the advantage in the US market.
Just two months.
American electronics companies felt their bones shatter from Korea's one-two punch.
“This is the power of Korean industry.”
If the war dragged on like this, the damage to American companies would be too severe.
Washington proposed negotiations, but the Koreans refused.
‘If we were going to stop midway, why start the war?’
Korea intended to pull out its sword and completely destroy America's electronics industry.
“At this rate, our electronics industry will be totally devastated.”
“So what do you propose?”
“We need national-level investment in semiconductor materials and equipment.”
Washington was late to the game, but it decided to pour money into semiconductors.
Even dumping cash like this couldn't solve the immediate problems.
Countering Korea's offensive required time to get materials and equipment sectors on track, but Pyongyang gave no such breathing room and kept the pressure on American semiconductor firms.
“What are you gonna do if we keep this up?”
American electronics companies painfully realized they couldn't get semiconductors on time through their domestic firms.
“We can't hold out like this.”
For survival, electronics companies started smuggling Korean semiconductors.
If that didn't work, they began scouting factory moves to Canada or Mexico.
The White House couldn't hide its shock as the war flowed one-sidedly.
“Our gap with Korea in electronics is this wide?”
“Regrettably, yes.”
“No countermeasures?”
“If we have to come up with one, it's turning a blind eye to smuggling.”
Withdrawing anti-dumping tariffs on Korean semiconductors now would just damage America's prestige.
So all they could do was pretend not to notice companies smuggling Korean semiconductors.
In truth, the problem America faced wasn't limited to semiconductors.
“We'll lower prices even more, so buy and use a ton of Korean stuff.”
Pyongyang showcased sophisticated subsidy techniques to Washington.
“If you subsidize like that, you could get hit with tariffs.”
“Oh? On what grounds?”
Korea didn't hand out subsidies as straight cash.
It came in the form of electricity bill cuts, water bill reductions, and tax breaks.
“Isn't setting tax rates up to each country?”
“That's not all you're doing!”
Korea also gave export firms free land and financial backing.
And that was it?
State agencies even stole intel on rival companies and handed it over.
This was outright the state pushing its companies.
“How is this fair competition?”
“It is fair competition. Prime Minister Yi Seong-jun said so.”
Korea's economic offensive grew fiercer by the day.
“Don't think our lineup is just high-tech products.”
Korea leveraged cheap labor in India and North China to mass-export shoes, clothing, timber products, and more.
Faced with Korea's all-out assault across every sector, the US government began pouring out subsidies too.
“These are extraordinary measures to protect our industries.”
Caught in the middle of the America-Korea subsidy arms race, Europe felt its eyes bulging.
“Are those bastards dead set on killing us?”
Europe jumped into the subsidy race in a hurry.
“We can't lose either.”
The Commonwealth leaped into the subsidy war too.
As the Western world and Korea kicked off their subsidy battle, deficits across countries skyrocketed exponentially.
‘Please. Let's agree at some reasonable line and end this insane chicken game.’
Weaker Europe and Britain thought this, but Korea and America didn't even scoff.
“No way until those bastards raise the white flag.”
While the entire First World screamed thanks to Korea, the Second and Third Worlds sang songs amid an unexpected raw materials boom.
“Money's multiplying just sitting here.”
Korea felt this bleeding contest was worth it.
‘The blood and sweat we and the First World shed will grow the Second and Third Worlds.’
Since Korea would swallow those nurtured markets whole, it could endure the current deficits as "investments."
‘Let's drag this war out once.’
Yi Seong-jun planned to carry this mad war all the way to the end of his term.