US Tariffs Likely to Severely Impact South Korean Economy: Experts Warn

US Tariff Measures May Severely Hit South Korea’s Economy, Warn Experts

Seoul, June 30: Trade experts in South Korea have voiced deep concern over the United States' sweeping tariff measures under President Donald Trump, warning that they could significantly harm South Korea’s economy by disrupting exports and destabilizing major industries. Experts urged the Seoul government to proactively negotiate with Washington to minimize the fallout.

During a public hearing held by the Ministry of Trade, Industry and Energy to gather opinions on Seoul’s negotiation strategy, Yang Joo-young of the Korea Institute for Industrial Economics & Trade said the U.S. accounts for over 18% of South Korea’s exports, and the tariff hikes could structurally damage key sectors like semiconductors, automobiles, batteries, and machinery.

“Access to the U.S. market will determine Korea’s position in the global tech race and supply chain,” Yang stressed, adding that the government should seek tariff exemptions and promote industrial cooperation in defense, shipbuilding, and energy.

A study by the Korea Institute for International Economic Policy (KIEP) estimated that South Korea’s GDP could shrink by 0.3% to 0.4% if the tariffs—including those not yet implemented—fully take effect. Currently, the Trump administration has imposed a 50% tariff on steel imports and 25% on foreign cars, with similar duties expected soon on semiconductors and pharmaceuticals.

However, KIEP’s Kim Young-gui noted that if Seoul manages to reach a trade deal like those struck by China and the UK, some export losses may be recovered.

Agricultural and livestock industry representatives raised concerns over potential U.S. demands to lift bans on importing beef from cattle over 30 months old, which could trigger public backlash. Suh Jin-kyo of the GS&J Institute warned that relaxing such regulations could harm consumer trust and reduce current U.S. beef exports.

Chang Sung-gil, Director-General for Trade Policy at the industry ministry, pointed out that while the U.S. recorded a $66 billion goods trade deficit with Korea, it has enjoyed consistent surpluses in services and agriculture, under the existing bilateral free trade agreement (FTA).

Negotiations are ongoing with the aim of reaching a comprehensive deal before July 8, the expiration date of a 90-day pause on reciprocal U.S. tariffs. South Korea is aiming to secure exemptions from the 25% tariffs, especially on steel, autos, and other crucial imports.

Vice Trade Minister Park Jong-won assured that all trade talks will prioritize national interests, and the government will reflect feedback from the public hearing in its final strategy before engaging in full-scale negotiations with the U.S.