Seoul: The implementation of U.S. tariff measures could shrink the American market and reshape global trade dynamics to potentially weaken the competitiveness of South Korean products, a local industry report showed.
According to Yonhap News Agency, the report by the Korea International Trade Association (KITA) revealed that among the top 10 exporting countries to the United States, only South Korea and China experienced negative U.S. export growth in the first four months of this year. This contrasts with most other countries, which saw increases in shipments to the U.S.
KITA compared changes in export competitiveness among major countries in the U.S. market between the year 2016, just before the start of President Donald Trump's first term, and 2023. The agency noted that as the U.S. increased trade restrictions on China and reinforced protectionist policies, China's presence in the American import market has diminished.
Meanwhile, Mexico and India have benefitted from this shift, increasing competition with South Korea. The report warned that if country-specific reciprocal tariffs are implemented, the overall size of the U.S. import market could decrease, leading to more intense competition between nations over overlapping export items.
"To mitigate the potential impact of reduced exports to the U.S. due to reciprocal tariffs, (domestic) companies should diversify production bases, cut production costs to lower the taxable price of goods, and expand exports of items that are either hard to replace or challenging to produce domestically in the U.S.," a KITA official stated.