Issue Korea: unpredictable US trade policy paths and Chinese price competition

Summary

For Korea, the report sees the weakening predictability of trade policy, rather than any particular tariff rate, as the main burden. The US is likely to keep its America-centred stance through alternative legal bases after the IEEPA ruling. Recurring volatility in the trade environment itself, more than whether a single measure is withdrawn, can therefore depress corporate investment, hiring and supply chain decisions. Slow recovery in Chinese domestic demand combined with sustained manufacturing capacity would intensify price competition in Korea's main export markets. The report expects these trade shocks, like the energy shock, to affect Korean sectors unevenly.