According to KIEP Analysis
The Korea Institute for International Economic Policy recently said in its report that the damage done to South Korean industries as a result of U.S.-China trade disputes amounts to 3.9 trillion won.
In July and August 2018, the United States and China imposed an additional tariff of 25 percent on each other. In September 2018 and May 2019, the United States added 10 percent and 25 percent, respectively. In response, China added 5 to 10 percent in September 2018 and 5 to 25 percent in June 2019. In addition, the United States and China added 15 percent and 5 to 10 percent in September 2019, respectively. They reached an agreement in December that year and the tariff rates were lowered with some tariffication postponed indefinitely.
“The United States’ additional tariffication led to a decline in South Korea’s exports to the United States and China of somewhere between US$760 million and US$1.36 billion,” the institute pointed out in the report, adding, “The tariffication significantly affected South Korea’s computer, electronics, chemical product and engineering equipment exports to China and China’s tariffication significantly affected South Korea’s exports to the United States of chemical products, automobiles, trailers, computers, electronic and optical devices, and primary metals.”
According to the institute, China’s tariffication led to a decline of US$215 million in South Korea’s industrial production and the United States’ resulted in a decline of US$1.615 billion to more than US$3.04 billion in South Korea’s industrial production.
“The disputes were expected to lead to an increase in South Korea’s exports to China with South Korean and U.S. products competing in China, but this turned out to be wrong,” it went on to say, continuing, “In the Chinese markets where the additional tariffs were levied on U.S. products, South Korean products’ share fell from 8.4 percent to 8 percent in 2019, when Taiwanese and Japanese products’ shares in the same markets edged down 0.16 percentage point and 0.08 percentage point, respectively.”
“These days, the disputes are intensifying in the 5G and semiconductor sectors in particular, and this is likely to affect the trade between South Korea and China in the ICT sector, which accounts for 47 percent of South Korea’s exports to China,” it said, adding, “South Korean semiconductor and display manufacturers in China are likely to take a direct hit along with many others.”