Trade war effect on Korea

[Anchor]

So, what impact will this have on us?

Let's go deeper with reporter Park Kyeong-jun.

Of course, it's about imposing tariffs on products from Canada, Mexico, and China, but our companies will inevitably be affected, right?

[Reporter]

To put it simply, our companies will face unavoidable damage.

Electric vehicle, battery, and home appliance companies with factories in those regions will be affected.

In Mexico, major domestic companies like Hyundai Motor Group, Samsung, LG, and POSCO have built numerous production plants and increased new investments.

In Canada, electric vehicle and battery companies like LG Energy Solution have also entered the market.

If tariffs that were almost nonexistent suddenly increase by 25% when exporting to the U.S., price competitiveness will inevitably weaken.

[Anchor]

So, what about us?

Could our country also become a target of these tariffs?

[Reporter]

Yes, it could.

President Trump has specifically mentioned imposing additional tariffs within the next few months on certain items such as semiconductors, steel, and aluminum, which are South Korea's largest export products.

He has also repeatedly referred to the 50% tariff imposed on South Korean washing machines during his previous term in 2018.

South Korea ranks eighth among the countries with which the U.S. has a trade deficit.

Last year, South Korea recorded its largest trade surplus with the U.S.

It is unlikely that President Trump will view this positively, and there are concerns that it could be used as a tool for renegotiating the Korea-U.S. FTA.

[Anchor]

How much impact will this have on our exports to the U.S.?

[Reporter]

There are many variables, so it's still difficult to estimate the specific increase or decrease in exports.

However, if we assume a general tariff of 10% is imposed, it is expected that our exports to the U.S. will decrease by about $5.5 billion, or approximately 8.4%.

Since China, our export competitor, is among the first targets for tariffs, there could be some indirect benefits.

While exports of intermediate goods may shrink, exports to the U.S. could actually increase.

In the long term, as retaliatory tariffs and protectionist policies strengthen, it is inevitable that our export-driven economy will be negatively affected.

[Anchor]

So, what is our government's plan?

[Reporter]

In neighboring Japan, Prime Minister Ishiba will meet with President Trump on the 7th.

Acting President Choi Sang-mok has not yet had a phone call with him.

Acting President Choi stated today (Feb. 2) that the additional tariffs on Mexico and other countries could have a significant impact on our companies and economy, and he has directed a response.

[Anchor]

Yes, thank you for the report.