Seoul, April 13th – Escalating trade tensions between the United States and China are casting a shadow over South Korean exports, according to a report by Yonhap News Agency. While the U.S. has temporarily suspended reciprocal tariffs on trade partners other than China, its tariff measures targeting Chinese goods could indirectly impact South Korea’s exports of intermediate goods.
The U.S.-China trade dispute has intensified, with President Trump raising tariffs on Chinese goods to 145% on April 11th, prompting retaliatory tariffs from China. This escalating tariff war raises concerns about the potential impact on South Korea, a major exporter of intermediate goods to China.
The Korea International Trade Association (KITA) reports that in 2023, 78.4% of South Korea’s exports to China consisted of intermediate goods. Notably, semiconductors and displays accounted for over 90% of high-tech intermediate product exports. This heavy reliance on intermediate goods exports to China makes South Korea particularly vulnerable to disruptions caused by the U.S.-China trade conflict.
The potential consequences of the U.S. tariffs on Chinese goods include:
- Reduced Chinese Exports to the U.S.: Higher tariffs on Chinese goods could lead to a decrease in Chinese exports to the U.S., thereby reducing China’s demand for intermediate goods used in the production of those exports.
- Decreased South Korean Exports to China: As China’s demand for intermediate goods decreases, South Korean exports of these products to China could also decline, negatively impacting the South Korean economy.
The situation remains fluid, and the long-term impact of the U.S.-China trade dispute on South Korean exports is still uncertain. However, the KITA report highlights the potential risks and underscores the need for South Korean businesses and policymakers to closely monitor the situation and develop strategies to mitigate any negative consequences. Diversifying export markets and strengthening domestic industries could be crucial steps in navigating the challenges posed by the ongoing trade conflict.
References:
- Yonhap News Agency. (2024, April 13). 美国对华关税恐使韩国中间产品出口受到冲击 [U.S. Tariffs on China May Impact South Korean Intermediate Goods Exports]. Retrieved from [Insert URL of Yonhap News Article Here]
Note: Please replace [Insert URL of Yonhap News Article Here] with the actual URL of the Yonhap News Agency article.
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