SEOUL: South Korea's acting President Han Duck-soo ordered emergency support measures for businesses that will be impacted by the imposition of U.S. tariffs, including automobiles, the industry ministry said on Thursday.
U.S. President Donald Trump has unveiled global reciprocal tariffs that include a 25% rate on South Korea.
Han asked the industry minister to analyse the content of the tariffs and actively negotiate with Washington to minimise the impact of U.S. reciprocal tariffs, the ministry said.
“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis,“ Han said at a meeting with the finance minister and other top officials, according to the industry ministry.
Trump in his speech singled out Washington's Asian security allies South Korea and Japan, accusing them of being among the worst offenders for conducting unfair trade practices against the United States.
Analysts in Seoul said Trump's extensive rollout of tariffs was harsher than expected, casting a cloud over the export-reliant economy.
“For the domestic economy, a significant blow will be inevitable,“ said Park Sang-hyun, an economist at iM Securities.
“It is clear that major export products such as automobiles will be hit hard, and exports to the U.S. through production bases in Vietnam will also be hit hard,“ Park said in a note.
Trump also said he will slap a 46% duty on imports from Vietnam. South Korea's major corporations such as Samsung Electronics and LG Electronics have manufacturing bases in the Southeast Asian country.
The benchmark KOSPI stock index fell as much as 2.7% to three-month lows in early trade, as automakers hit their lowest levels in more than 14 months. Chipmakers also slumped, while battery maker LG Energy Solution hit a record low.
Finance Minister Choi Sang-mok said authorities would deploy all available tools to stabilise financial markets if volatility was seen as excessive, after a separate meeting with the central bank governor and other financial regulatory officials.
Han will preside over a meeting with the private sector later on Thursday to discuss responses to the U.S. tariffs.
Before Trump's announcement on reciprocal tariffs, South Korean officials had sought exemptions, arguing the country had almost zero tariffs in place under a comprehensive free trade pact with the United States.
