SEOUL, February 13 (AJP) - U.S. President Donald Trump’s escalating trade war is sending shockwaves through South Korea’s export-driven economy, as tariffs now extend beyond steel and aluminum to key industries such as automobiles and semiconductors.
Trump announced Sunday that the United States would impose a 25 percent tariff on all steel and aluminum imports from March 12, without exception.
He also signaled that additional tariffs on automobiles, semiconductors, and pharmaceuticals were under consideration.
South Korea faces significant economic repercussions. The five sectors already hit or under threat of tariffs accounted for $52.3 billion in exports to the United States last year — 41 percent of the country’s total exports to the U.S. market.
The steel industry is particularly vulnerable, as the United States ranks as its largest export market by value and third by volume. Previously, South Korean steel producers operated under a quota system that limited their exports but exempted them from tariffs. Now, a universal 25 percent tariff threatens their price competitiveness.
Even more troubling is the prospect of tariffs on automobiles and semiconductors, pillars of South Korea’s economy.
"Unlike steel, tariffs on these industries could cause economic tremors on an entirely different scale. Automobiles and semiconductors are the nation’s top two exports to the United States, accounting for more than a third of total shipments," an analyst said on condition of anonymity.
Half of all South Korean auto exports are destined for the U.S., while semiconductor sales there surpassed $10 billion for the first time last year, fueled by the artificial intelligence boom.
The global credit rating agency S&P recently warned that a 20 percent tariff on South Korean automobiles could slash Hyundai Motor and Kia’s operating profits by as much as 19 percent.
As the White House presses ahead with its aggressive trade stance, countries worldwide are scrambling to secure exemptions.
Australia successfully negotiated a steel and aluminum tariff exemption through direct communication between top leaders. Taiwan, concerned about semiconductor tariffs, plans to send senior economic officials to Washington.
Experts say South Korea must move swiftly to engage in high-level negotiations.
"During Trump's first term, South Korean companies created 830,000 jobs in the United States, making the country one of America’s largest foreign employment contributors," said a researcher from a state-run institute. "Seoul must highlight this record, emphasizing its role as a key partner in U.S. manufacturing resurgence."
Additionally, expanding imports of American energy and proposing mutually beneficial deals in industries such as shipbuilding, defense, nuclear energy, and semiconductors — sectors where the Trump administration has strategic interests — could help South Korea negotiate favorable terms, the researcher said.
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