Stock prices in Seoul rise for the third consecutive day amidst uncertainties over potential US tariffs; South Korean currency heavily depreciates.
As of late July 2025, trade negotiations between South Korea and the United States remain unresolved and tense, with a looming threat of steep tariffs imposed by the U.S. on South Korean exports. The U.S. planned to impose a 25% tariff starting August 1, but there is ongoing last-minute diplomacy to avoid this outcome.
Key points of the current status include:
- Tariff threat: The U.S., under President Trump, initially set a 25% tariff on South Korean goods, postponed from July 8 to August 1, with potential for further extensions depending on negotiation progress.
- Main sticking points: The disputes hinge notably on South Korea’s auto industry exports to the U.S., which are significant, and U.S. demands for South Korea to open up its agricultural and livestock markets.
- South Korea’s proposals: To avert tariffs, South Korea has pitched a significant shipbuilding partnership dubbed "Make American Shipbuilding Great Again", aiming for a large-scale project to satisfy U.S. demands.
- Negotiation timeline: South Korea seeks to extend negotiations beyond the July 9 deadline as disagreements remain, with South Korean leadership signaling difficulty in concluding a deal by the original deadline.
Potential impacts on South Korea’s economy include:
- If tariffs are imposed, a 25% duty on key exports like automobiles could harm South Korea’s export competitiveness, reduce shipments to the U.S., and negatively impact the country’s trade balance and industrial sectors.
- Resolving negotiations favorably, especially via industrial partnerships like shipbuilding, could mitigate economic disruption and foster closer industrial cooperation with the U.S.
- Pressure to open agricultural markets could affect domestic farmers and livestock producers in South Korea, creating political and economic challenges internally.
In summary, the trade talks are at a critical juncture with significant economic stakes. The outcome will likely influence South Korea’s export-driven economy, especially its automotive and shipbuilding sectors, and political-economic relations with the United States.
In the local market, the benchmark Korea Composite Stock Price Index closed at 3,196.05, adding 5.6 points or 0.18 percent. The auto sector experienced mixed fortunes, with LG Energy Solution shedding 1.22 percent, mirroring Tesla's 8.2 percent decline overnight, while Naver, the local internet portal operator, jumped 3.3 percent to 234,500 won. On the other hand, Samsung Electronics edged down 0.15 percent to 65,900 won, while SK hynix lost 1.3 percent to 266,000 won.
Elsewhere, major shipbuilder HD Hyundai Heavy rose 5.83 percent to 444,500 won, and Hanwha Ocean gained 1.35 percent to 90,000 won, on expectations for cooperation in the sector with the U.S. Retail investors unloaded 461.3 billion won worth of shares, while foreigners and institutions bought shares worth 268.9 billion won and 110.4 billion won, respectively. The local currency was quoted at 1,377.9 won against the US dollar at 3:30 p.m., down 10.7 won from the previous session.
[1] The Korea Herald
[2] Yonhap News Agency
[3] The Chosun Ilbo
[4] Bloomberg
[5] Reuters
- The finance sector is closely monitoring the ongoing trade negotiations between South Korea and the United States, as a potential 25% tariff on South Korean goods could impact the country's business competitiveness in areas like the automobile and shipbuilding industries.
- Personal-finance experts are advising South Korean investors to keep a close eye on the general-news outlets like The Korea Herald, Yonhap News Agency, The Chosun Ilbo, Bloomberg, and Reuters for updates on the tariff threat, as the outcome could significantly influence their portfolios, especially those invested in South Korean stocks.
- In the technology sector, the tariff threat and subsequent negotiations could also have implications for technological collaborations between South Korean and American companies, given the potential for increased costs and reduced competitiveness.
- Crime-and-justice reports have indicated an uptick in fraud cases related to personal-finance matters as a result of the uncertainty surrounding the trade negotiations, with some investors falling prey to scams promising insider information or guaranteed returns.
- The accidents section of local news outlets has covered an increase in road accidents due to a higher number of drivers distracted by constant updates on their smartphones regarding the trade talks and potential economic impact on their personal-finance situations.
