Seoul: South Korea will establish tailored strategies for different scenarios in response to potential changes in U.S. trade policy following the inauguration of President-elect Donald Trump next week, the industry ministry announced Tuesday. "If the United States introduces detailed trade protectionism measures, significant impacts on South Korea's exports will be inevitable," the Ministry of Trade, Industry and Energy stated in a policy report. Concerns have also been raised about the possibility of protectionist measures spreading among major markets in a chain reaction.
According to Yonhap News Agency, the ministry is currently formulating strategies based on "accurate data" to counter potential moves by the Trump administration to implement protectionist measures targeting countries with trade surpluses with the U.S. South Korea will also maintain a coordinated information-sharing system with major partners, including Japan, the European Union, Canada, and Mexico.
Trump has pledged to impose a 25 percent tariff on all products from Mexico and Canada, as well as an additional 10 percent tariff on goods from China. This proposal has raised concerns among South Korean companies investing in Mexico and Canada, which rely on the U.S.-Mexico-Canada free trade agreement (FTA), known as USMCA, to access the North American market.
During a meeting with reporters Monday, Industry Minister Ahn Duk-geun noted South Korea's focus will be on ensuring incentives provided to South Korean firms under the Inflation Reduction Act are maintained, rather than preserving the act itself. The ministry aims to work on expanding export destinations for South Korean businesses in 2025.
As of the end of 2024, South Korea had 22 FTAs in effect, providing access to markets that collectively account for 85 percent of the global gross domestic product. The country plans to officially implement four additional FTAs signed with the Gulf Cooperation Council (GCC), the United Arab Emirates, Guatemala, and Ecuador this year, which are expected to further boost the market access ratio to over 87 percent.
The ministry added that Seoul will also accelerate trade negotiations with Malaysia, Thailand, Mongolia, Bangladesh, and Serbia this year.