Trump-initiated tariff war begins… South Korean companies, initially spared, urgently preparing countermeasures.
U.S. President Donald Trump went ahead with his plan to impose tariffs on Mexico, Canada, and China on the 1st (local time). As a result, the South Korean economy has fallen under the influence of the "Trump tariffs." Many major companies and their partners, including Samsung Electronics, LG Electronics, Kia Motors, and POSCO, operate production plants in Mexico and Canada. The industry analyzes that if the tariff war sparked by Trump expands in all directions, the export-dependent South Korean economy could suffer a direct blow. According to foreign reports, including the AP, U.S. President Donald Trump signed three executive orders on the 1st, imposing a 25% tariff on all imports coming from Canada and Mexico and a 10% tariff on Chinese products. These measures are set to take effect on the 4th. However, the additional tariff on Canadian energy resources will be set at 10%, not 25, in consideration of potential price increases. In response to the tariffs, Canada and Mexico have firmly stated their intention to retaliate, but the executive orders also include provisions for further retaliation. The executive order regarding Canada specifies, "If Canada imposes tariffs on U.S. imports or takes similar measures in retaliation for these actions, the President may increase or expand the tariffs to ensure the effectiveness of these measures." Most importantly, if these measures continue, South Korean companies with factories in Mexico are expected to suffer as well. Companies like Samsung Electronics, LG Electronics, Kia, and POSCO have expanded investments in Mexico, either by increasing production capacity or setting up new plants. South Korea's investment in Mexico surged dramatically, from $11 million in 2020 to $396 million in 2022. Samsung Electronics operates home appliance and TV factories in Querétaro and Tijuana, Mexico. LG Electronics has production bases in Reynosa (TVs), Monterrey (refrigerators), and Ramos (automotive electronics). Kia's Mexican plant produced a total of 253,000 vehicles from January to November last year, including 175,000 K3s, 64,000 K4s, and 14,000 Tucsons, with 128,000 K3 units sold to the U.S. Hyundai Mobis and Hyundai Transys also operate production plants, and other supply chain participants are also running operations. In Canada, a joint factory between LG Energy Solution and Stellantis produces battery modules, while POSCO Future M is constructing a joint battery cathode materials plant with General Motors (GM) in the country. Additionally, with President Trump maintaining a hardline stance by imposing blanket tariffs on even trade allies, there are concerns that South Korea's export front will face significant challenges. South Korea ranks eighth among the countries with the largest trade surpluses with the U.S., and if tariffs are imposed, it could pose serious risks to the export-dependent South Korean economy. On the 31st of last month, President Trump indicated plans to impose tariffs on imports of semiconductor, pharmaceuticals, steel, aluminum, copper, oil, and gas. This means that semiconductors, South Korea's largest export product, could fall within the scope of the tariff war. Last year, South Korea's annual trade surplus with the U.S. reached a record high of $55.69 billion. An industry insider stated, "Trump will begin implementing extensive and aggressive tariff pressure starting in the second quarter." He added, "While companies operating in Mexico and Canada will face issues, domestic companies that supply intermediate goods to China will also be affected. Therefore, the entire domestic industry will need to work with the government to prepare more refined countermeasures." ChatGPT를 사용하여 번역한 기사입니다.
