South Korea facing billions in lost exports as a result of US trade safeguards

Posted on : 2018-03-08 16:44 KST Modified on : 2019-10-19 20:29 KST
Trade protectionism could cost the country up to $6.8 billion and 45,000 jobs in related industries over five years
Gary Cohn
Gary Cohn

South Korea could face US$6.8 billion in lost exports to the US and the loss of 45,000 jobs over the next five years if the US expands its trade retaliation measures from steel, washing machines, and solar cells to semiconductors and automobile parts, a researcher warned.

Chonbuk National University professor Choi Nam-suk delivered the prognostications in a presentation on the “outlook for US trade pressures and their ripple effects” at an “emergency US trade strategy review” seminar held on Mar. 7 by the Korea Economic Research Institute (KERI), a sister organization to the Federation of Korean Industries (FKI).

“The South Korean steel industry stands to suffer the biggest flow if the 25% global tariff [announced by the US] is applied, with at least US$2.4 billion export losses over the next five years,” Choi predicted.

“Another US$2.1 billion dollars in export losses are also forecast for washing machines and solar cells, where safeguards and other retaliatory measures have already been announced,” he said.

Choi went on to say that semiconductors and automobile parts were “the most likely candidates for additional South Korea trade measures from the US.”

“A safeguard tariff of between 15% and 33$ over three years for semiconductors and automobile parts would be expected to result in US$2.3 billion in export losses,” he said.

Choi also predicted the loss of 45,000 jobs if the growing US trade onslaught results in reduced exports in the five categories. The biggest loss would be for automobile parts at 17,600 jobs, followed by 13,000 jobs in steel, 10,000 in solar cells, 2,300 in washing machines, and 2,000 in semiconductors, he said.

In a keynote speech, Kim Jong-hoon, a former National Assembly member who served as Minister for Trade under the Roh Moo-hyun administration, addressed the issue of a response to the US trade measures.

“If we decide to go with a World Trade Organization (WTO) complaint and other dispute resolution measures, we will need to work in concert with other countries that share our position, while making maximum use of international opinion, utilizing the South Korea-US Free Trade Agreement amendment negotiations as a ‘fire hydrant’ to reduce US trade pressures, and establish friends among the US industries and members of Congress who have direct interests with [South Korea’s] trade and investment in the US,” Kim suggested.

By Kwack Jung-soo, Business correspondent

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