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by IANS |
Seoul, Feb 14 (IANS) Acting President Choi Sang-mok said on Friday that the impact of US President Donald Trump's latest "reciprocal" tariffs may not significantly affect South Korea's economy, yet emphasised the need for continued monitoring.
On Thursday (US time), Trump signed a presidential memorandum outlining a comprehensive plan to impose country-specific tariffs on the United States' major trading partners, raising concerns here as South Korea's trade surplus with the US reached $55.7 billion last year.
During a meeting with government ministers on economic issues, Choi noted that the impact of the latest U.S. policy might be limited, due to the low tariff rates South Korea applies to U.S. exports under the countries' bilateral free trade agreement (FTA), reports Yonhap news agency.
Under the FTA, the average tariff rate on imports from the U.S. stood at 0.79 per cent as of 2024, with the rate lowered when considering refunds, the finance ministry said. The rate is expected to decrease further this year in accordance with the annual tariff reduction plan.
The ministry said the tariff rate on manufactured goods imported from the U.S. is already at zero per cent.
However, the acting president stressed the importance of close monitoring, as the U.S. is expected to assess not only tariffs but also non-tariff barriers, such as value-added taxes and digital service taxes.
In response, Choi instructed the relevant ministries to establish a task force to thoroughly assess the country's vulnerabilities and non-tariff barriers, and prepare materials to explain the country's position to U.S. officials.
Meanwhile, the South Korean economy faces "increasing downward pressure" due to heightened uncertainties both domestically and globally, leading to weakened economic sentiment amid a slowdown in domestic demand recovery and employment, the finance ministry said on Friday.
In its monthly economic report, the Green Book, the Ministry of Economy and Finance cited downward pressure for the third consecutive month, attributing it to domestic political uncertainties and an escalating global trade war fuelled by U.S. tariff plans.
"The global economy continues to face geopolitical risks, with growing trade uncertainty due to the implementation of major tariff measures," the report said. Since taking office last month, U.S. President Donald Trump has escalated tariffs on key trading partners.
The latest assessment builds on the December report, where the ministry first highlighted downward pressure following President Yoon Suk Yeol's brief declaration of martial law Dec 3.
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