According to Refinitiv, the South Korean government urgently held a meeting on Thursday (April 3) to discuss response plans for the latest global reciprocal tariff policy announced by the United States. Acting President Han Deok soo instructed relevant departments to take immediate action, seeking negotiations with the United States on one hand, and developing emergency support measures to protect South Korea's export-oriented economy from shocks on the other.

Policy background and government response

US President Trump announced a 25% tariff policy on multiple countries, including South Korea, and specifically named Asian allies such as South Korea and Japan, accusing them of unfair trade practices. The South Korean Ministry of Industry, Trade and Resources immediately issued a statement, and Acting President Han Deok soo requested the Minister of Industry to immediately analyze the tariff details and actively engage in negotiations with the United States to reduce the impact. At an emergency meeting with senior officials such as the Minister of Finance, Han Dezhu emphasized, "The global trade war has become a reality, and the government must make every effort to address this trade crisis

Minister of Industry, Trade and Resources, Andegen, expressed "regret" over the US decision, but promised to continue consultations with relevant US officials. Officials from the South Korean Ministry of Planning and Finance have revealed that the government is actively seeking to lower tariff rates through negotiations. An anonymous official admitted that in the current geopolitical environment, South Korea finds it difficult to take strong countermeasures and can only seek solutions through diplomatic channels.

Economic Impact Assessment

Seoul analysts generally believe that the new tariffs will have a serious impact on the South Korean economy. IM Securities analyst Park Sang hyun pointed out that major export products such as automobiles will be the first to bear the brunt, and products exported to the United States through Vietnamese production bases will also be severely affected. It is worth noting that Trump has also imposed a 46% tariff on Vietnamese imports, which will directly affect the production layout of South Korean companies such as Samsung Electronics and LG Electronics in Vietnam.

Citibank's latest assessment shows that the new tariffs may lead to a 0.16% decrease in South Korea's GDP this year, putting the originally expected 1.0% economic growth at risk of being lowered. Paik Seok hyun, an economist at New Korea Bank, bluntly stated that this move actually renders the Korea US Free Trade Agreement ineffective.

Image: South Korea's exports to the United States set a record high in 2024

Collaborative response between government and enterprises

In order to respond to the crisis in a timely manner, senior officials of the South Korean government urgently met with business leaders on Thursday to discuss countermeasures. Acting President Han Dezhu will host a special meeting with the civilian sector that evening to discuss specific response plans. Although specific support measures have not been announced yet, it is expected to include a package of enterprise assistance plans such as export subsidies and tax incentives.

summarize

Faced with the sudden tariff policy of the United States, the South Korean government has shown a proactive response attitude. Through the mechanism of government enterprise linkage, on the one hand, we seek diplomatic negotiation channels, and on the other hand, prepare domestic support policies, striving to minimize the impact on the export economy. In the current complex international economic and trade environment, South Korea is striving to find a balance between safeguarding national interests and maintaining the US South Korea alliance.