South Korea Braces for Investment Surge Amid Potential U.S. Tariff Hike

South Korea's trade minister anticipates an increase in domestic firms' investment in the U.S. if the next president imposes higher tariffs. Following Trump's claim to the presidency, the possibility of tariffs between 10% to 20% could prompt companies to boost U.S. production and exports.

South Korea's trade minister indicated on Wednesday that domestic companies might increase their investments in the United States if the succeeding U.S. administration enacts higher tariffs.

These comments came shortly after Republican Donald Trump declared victory in the 2024 presidential election. Trade Minister Cheong In-kyo expressed that if tariffs are increased, companies could pivot towards boosting direct investments and enhancing on-site production in the U.S., as he explained during an interview with Reuters.

Cheong elaborated that while there are current investments underway, the situation might lead to accelerated investment and a potential subsequent rise in U.S.-bound exports by small and medium-sized component manufacturers. Trump's proposal includes blanket tariffs ranging from 10% to 20% on all U.S. imports, which, according to a South Korean state-run think tank, could potentially slash $44.8 billion in exports from South Korea's trade-reliant economy.

(With inputs from agencies.)