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[Global Times Comprehensive Report] "Trump's victory may bring trouble to export-oriented South Korea." The Korea Times reported on the 21st that some observers said that if former US President Trump wins again in the US election in November, the South Korean economy may lose its growth momentum.

On July 20, 2024, local time, in Michigan, the United States, Republican presidential candidate Trump attended a campaign rally in Michigan. (Visual China)

The article said that many parties in South Korea are concerned that tariffs on goods produced by South Korea's main export-driven industries and exported to the United States may increase to 10%. This includes the automotive, artificial intelligence (AI) and battery industries, a considerable number of which are the main beneficiaries of the US government's expanded subsidies under the Inflation Reduction Act and the Chip and Science Act.

Analysts believe that South Korea's record trade surplus with the United States will fuel Trump's protectionist actions. According to data from the Ministry of Trade, Industry and Energy and the Korea International Trade Association, South Korea's trade surplus with the United States reached US$28.7 billion in the first half of this year, an increase of 55.1% year-on-year. South Korea's trade surplus this year is expected to reach US$50 billion, breaking last year's record of US$44.4 billion.

"From a trade perspective, this will not bring any benefits," said a report released by the Korea Institute for International Economic Policy (KIEP). Trump said that tariffs of 60% to 100% will be imposed on Chinese-made goods, and the tariff rate of US trading partners will soar from the current 3% to 10%. The renegotiation of the South Korea-US Free Trade Agreement may be coming soon.

South Korean electric vehicle and battery manufacturers may no longer be eligible for U.S. government subsidies, which will weaken the strong sales momentum of these industries over the past year. The resulting reduction in cost advantages will lead to a slowdown in South Korea's economic growth.

The KIEP report mentioned that Trump said that car companies and auto parts manufacturers in South Korea, Japan, Europe, Mexico, and Canada are important factors in the US auto trade deficit. The auto-related industry accounts for about 70% of South Korea's trade surplus with the United States. According to data from the South Korean Ministry of Trade, Industry and Energy, South Korea's auto-related exports in the first half of the year reached US$19 billion, an increase of 28.9% over the same period last year. (Han Wen)