The United States government has decided to impose additional tariffs on Chinese goods worth a total of US$200 billion, escalating a trade war between the two superpopwers. A tariff rate of 10% is applied from September 24 and the rate will be adjusted to 25% late this year or early next year.
According to local industry sources on Sept. 18, the additional tariffs are likely to lead to a decline in South Korea’s exports to the U.S. and China as well as its domestic production.
The Korea Institute for Industrial Economics & Trade predicted that the tariffs of the U.S. and China on imported goods worth US$50 billion can decrease South Korea’s exports to the two countries by US$330 million.
A global trade war may break out if the two countries continue to raise tariff barriers and this situation can continue even after the U.S. off-year elections scheduled for November. Then, South Korea’s exports may drop and its domestic economy may deteriorate at a more rapid pace.
Under the circumstances, the Ministry of Trade, Industry & Energy convened an emergency meeting on September 18 to discuss the issue. It is going to hold another meeting on September 20 with export support agencies and industry-specific organizations.