Trump-Triggered Tariff War... "Export Competition Between Korea and China May Intensify"

"Windfall Benefits Also Expected During China's Retaliatory Measures"
International Financial Center Report

Due to the 'tariff war' triggered by U.S. President Donald Trump, there is a forecast that export competition between South Korea and China could intensify further.

On the 3rd, the International Financial Center analyzed in its report titled "Evaluation and Outlook on U.S. Tariffs on China" that "If the U.S. imposes tariffs, it could deepen China's overproduction, and if Chinese companies shift their exports to other countries, competition with South Korea in the global export market may become fiercer."

According to the report, recent surveys show that Chinese companies believe there is a possibility that the U.S. will actually impose tariffs as high as 60%, and in that case, they expressed an intention to expand exports to third countries.

The International Financial Center forecasted, "The tariff policies initiated by Trump could escalate trade conflicts between the U.S. and advanced countries, and trade frictions could also increase not only between China and advanced countries but also between China and emerging countries." It added, "If U.S. tariffs on China are strengthened and Chinese low-priced products move to other emerging countries, and protectionism spreads rapidly, global growth this year and next year could slow to around 1%."

However, the possibility that South Korea could gain a windfall benefit from the 'tariff war' was also mentioned.

The International Financial Center predicted, "During the process of U.S. tariff imposition and China's countermeasures, the export competitiveness of our products is expected to increase not only in the U.S. but also in the Chinese market, and windfall benefits such as expanded investment from the G2 (U.S. and China) in South Korea are anticipated." It continued, "If U.S. tariffs are limited to China, it is necessary to actively utilize the balloon effect that enhances South Korea's export competitiveness to the U.S."

Meanwhile, President Trump signed an executive order on the 1st (local time) imposing tariffs on China, Canada, and Mexico. The executive order will take effect from the 4th. China was subjected to an additional 10% tariff on top of existing tariffs. The Chinese Ministry of Commerce has announced it will "file a complaint against the U.S. with the World Trade Organization (WTO) and take countermeasures," signaling a retaliatory response.