[Good Morning Stock Market] 'Trump 2nd Term' First Day Tariff Imposition Postponed... "Korean Stock Market Expected to Start Higher"

Donald Trump, who officially took office as the 47th President of the United States, is expected to hold off on imposing tariffs, leading to a rise in the Korean stock market on the 21st.

Employees at the Hana Bank dealing room in Jung-gu, Seoul are working. Photo by Jo Yong-jun

On the 20th (local time), President Trump emphasized "America First" during his inauguration ceremony held at the Rotunda Hall of the U.S. Capitol in Washington D.C. Along with this, he announced simultaneous executive orders focusing on deportation of illegal immigrants, expansion of oil and gas drilling, abolition of mandatory electric vehicles, and imposition of tariffs.

However, contrary to concerns, President Trump did not mention immediate new tariff impositions in his inaugural address. After winning the election, he had previously announced in November that he would sign executive orders imposing tariffs on Mexico, Canada, and China on his first day in office. The U.S. daily Wall Street Journal (WSJ) commented, "This shows that intense debates are still ongoing within the incoming administration regarding the method of fulfilling the campaign promise of imposing high tariffs."

On the same day, the won-dollar exchange rate plunged during overnight trading, falling to the 1,440 won level. The U.S. stock and bond markets were closed in observance of Martin Luther King Jr. Day.

Seokhwan Kim, a researcher at Mirae Asset Securities, explained, "The attendance of big tech companies at the inauguration attracted attention, and the potential change in the relationship between Silicon Valley and the White House has become a key variable for investment." He added, "Coupled with the news of no tariffs, the dollar weakened significantly against major currencies in the foreign exchange market. Meanwhile, Bitcoin surpassed its previous intraday high for the first time in a month and set a new all-time high, fueled by expectations of a 'Trump trade.'"

Jiyoung Han, a researcher at Kiwoom Securities, predicted, "The news that 'tariff imposition' was not included in President Trump's first executive order, the strength of automobile stocks in European markets, and the sharp drop in the won-dollar exchange rate will contribute to a positive start." She also forecasted, "As the earnings season is underway, stock prices will show varying momentum by sector during the day, influenced by export results up to the previous day affecting export stocks and individual corporate earnings events."

Han added, "Semiconductors (-420 billion won), machinery (-200 billion won), and automobiles (-161 billion won), which are scheduled to announce earnings this week, recorded high net selling mainly by foreigners," and expressed hope that "buying demand may return after the actual earnings announcements." She continued, "The uncertainty surrounding Trump's inauguration, which served as a short-term profit-taking excuse, has been largely absorbed, which will help ease foreign net selling," emphasizing, "The low foreign ownership ratio in the KOSPI, the merit of low prices, and the easing of exchange rate burdens mean that the incentives to buy Korean stocks remain intact."

Jiwon Kim, a researcher at KB Securities, stated, "President Trump refrained from mentioning specific tariff policies in his inaugural speech," and explained, "Contrary to concerns, there is a possibility that immediate additional tariff impositions will be postponed." He also noted, "The decline in the dollar will have a positive impact on the domestic stock market."

However, Kim added, "Sector differentiation is expected following the announcement of executive orders related to energy," and said, "With the launch of Trump's second phase raising caution and the absence of indicators to move the market for the time being, sensitivity to policy variables will increase."