South Korea’s trade minister, Cheong In-kyo, indicated that if the incoming U.S. administration, led by Donald Trump, imposes higher tariffs, South Korean companies may increase investments in the U.S. in response. Cheong highlighted that the government would engage in trade diplomacy but noted that individual companies might take faster action, including boosting direct investment and local production.
Cheong’s comments came after Trump’s victory in the 2024 U.S. election. He noted that South Korean firms may accelerate investments, particularly in small and medium-sized parts manufacturing, in response to potential tariffs. Trump has suggested imposing broad tariffs of 10% to 20% on all imports, which could significantly impact South Korea’s export-driven economy. The move could particularly hurt South Korean automakers, which rely on domestic production for U.S. vehicle sales. Trump has also threatened a 200% tariff on imported cars, which would affect major Asian automakers.
In 2023, South Korean investments in the U.S. amounted to $27 billion, marking 44% of the country’s total foreign investments. Despite the tariff threat, Cheong reassured that trade relations with the U.S. and China would remain strong, and that the South Korean government is prepared with responses to various scenarios.
South Korean exports in October showed signs of slowing, but Cheong remains optimistic that overall exports will surpass last year’s total. The country’s trade surplus with the U.S. hit a record $44.4 billion in 2023, with cars making up nearly 30% of exports. However, shares of South Korean automakers and battery firms dropped following concerns over the potential tariff impact.
NEWS DESK
PRESS UPDATE