"In the future, all countries and companies will face increasing pressure to choose between the United States and China."
Chad Bown, a leading trade expert and Senior Research Fellow at the Peterson Institute for International Economics (PIIE), made these remarks during an interview immediately following his keynote speech at the 30th Anniversary Summer Academic Conference of the Korean Association of International Trade and Investment, held at Seoul's FKI Tower in Yeongdeungpo District on the 1st. The conference was jointly organized by The Korea Economic Daily (Hankyung) Association and the Korean Association of International Trade and Investment.
Regarding South Korea, Bown stated that it is "an essential player with strengths within the Western ecosystem" and emphasized that "given these factors, which side to choose is clear." He predicted that if South Korea were to align with China, it would be difficult for the country to maintain its current status.
On recent large-scale investments by South Korean companies in the United States, including factory construction and shipbuilding sector reconstruction, Bown urged a cautious approach. While he noted that "the South Korean government and companies appear to be thoroughly reviewing which US investments are appropriate," he advised that "investments tied to agreements with the Trump administration must undergo continuous due diligence and review, and if public funds are involved, profitability should also be assessed."
Bown identified "maximizing its own strengths" as South Korea's strategic approach as a middle power positioned between the US and China. He stated that "South Korea possesses many strengths that the United States and the West truly need," citing memory semiconductors, shipbuilding, batteries, and electric vehicles as representative examples. He added, "When the United States does not want Chinese-made products, South Korean companies can become the best alternatives." He concluded that "continuing to invest in and develop these strengths is the optimal strategy."
However, he stressed that the costs associated with such choices must be clearly understood. Bown noted that "choosing one side may require abandoning sales in the other market or access to essential resources," adding that "while there will be costs and consequences, the world is already moving in that direction."
He also expressed strong concern over predatory pricing policies by Chinese companies and the potential for market barriers. Bown explained that "if China comes to dominate 90% of global production for a specific product, it could weaponize supply cuts or raise prices to monopolize profits." He further revealed that "in industries with high fixed costs, he has witnessed cases where Chinese state-owned enterprises engaged in predatory pricing to block Western companies from entering the market."
Chad Bown is a trade policy expert who previously served as the Senior Economist at the US State Department under the Biden administration and as the Chief Economist of the White House Council of Economic Advisers (CEA) during the Obama administration. The Peterson Institute for International Economics (PIIE), where he currently works, is a leading international economic think tank headquartered in Washington, D.C., United States.
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