The benchmark KOSPI index surged more than 50 percent during Trump’s presidency from 2017 to 2021, climbing from 2,072.79 to 3,114.55, according to the Korea Exchange. However, the period was not without volatility - most notably a 17.28 percent decline in 2018 amid escalating trade tensions between the United States and China.
Trump’s return to the White House could reignite protectionist policies, forcing Asian export-driven economies, including South Korea, to navigate an increasingly volatile landscape. Market analysts are now focused on Trump’s campaign pledge to impose universal tariffs of 10 to 20 percent on all imports, a policy that could have sweeping implications for Korea.
“We will begin charging those that make money off of us with trade, and they will start paying, finally, their fair share,” Trump declared on Truth Social on Jan. 14, promising to establish an “External Revenue Service” to enforce the collection of tariffs, duties, and other foreign-sourced revenues.
The potential ramifications of Trump’s trade policies extend beyond South Korea, casting a shadow over other Asian markets.
Experts predict that Washington may again prioritize India in its Pacific strategy, as it did during Trump’s first term.
India may prove resilient in the face of Trump’s tariff threats. With U.S. trade accounting for only 3.1 percent of India’s GDP in 2023, the country’s exposure to Trump’s protectionist agenda is limited.
Moreover, India’s trade surplus with the United States remains modest compared to other Asian economies.
Meanwhile, Chinese and Vietnamese markets are under mounting pressure. Trump has previously threatened tariffs as high as 60 percent on Chinese goods, and analysts fear Vietnam could face scrutiny as a potential conduit for Chinese exports seeking to bypass U.S. restrictions.
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