SEOUL (Reuters) -South Korea’s industry minister said on Monday that the country managed to avoid the worst-case scenario by clinching a U.S. tariff deal, but concerns remained over how the profitability of exporters would be affected by a 15% tariff rate.
“There are concerns that the unprecedented 15% tariff will have a significant impact on the profitability of companies exporting to the U.S., especially small and mid-sized companies, compared to local U.S. companies,” Industry Minister Kim Jung-Kwan said at a roundtable meeting with business groups.
Under last week’s deal with U.S. President Donald Trump, South Korea also agreed on a $350 billion investment package, including $200 billion in strategic industries such as semiconductors. The rest was earmarked for the U.S. shipbuilding industry.
Kim said that the government would continue discussions with the U.S. to work on the specifics of the investment package so it would benefit the country’s economy and companies.
There is no written agreement yet on the deal between Seoul and Washington, and more follow-up discussions were needed on the investment fund’s structure among other details, South Korean officials have said.
Chey Tae-won, chairman of the SK Group conglomerate, who also heads the Korea Chamber of Commerce, said it was premature to say the deal has been concluded, as details still needed to be hammered out.
Industry Minister Kim responded by likening Korea’s position after the agreement with the U.S. to a patient who had just gone through a surgery, though the risk remained that the patient’s condition could reoccur or need medicine.
Regardless of the tariff deal, South Korea will seek a long-term strategy in the face of a new normal era where nationalism is expanding in the global trade environment, Kim said.
(Reporting by Ju-min Park and Hyunjoo Jin; Editing by Ed Davies)
