South Korean firms warn of 4.9% export decline

If current U.S. tariff policies remain unchanged, South Korean companies may see exports fall by nearly 5 percent this year, according to a new industry survey.

The Federation of Korean Industries (FKI) on Monday released the results of a study titled "Impact of and Response Strategy to the U.S. Trump Administration's Tariff Policy," conducted by Mono Research. The findings are based on responses from domestic exporters.

On average, firms projected a 4.9 percent drop in export volume this year compared to 2024. By sector, expected declines were sharpest in electrical and electronics at 8.3 percent, followed by automobiles and parts at 7.9 percent, petrochemicals and petroleum products at 7.2 percent, general machinery at 6.4 percent, semiconductors at 3.6 percent, and steel at 2.8 percent.

The survey also found that sales and operating profits of major exporters could fall by 6.6 percent and 6.3 percent, respectively.

The most cited difficulty under the U.S. tariff regime was "increased uncertainty due to frequent policy changes," mentioned by 24.9 percent of respondents. In response, companies are adopting strategies such as diversifying export markets (26.9 percent) and overhauling global production, procurement, and logistics systems (19.8 percent).

When asked about desired government action, 44.6 percent called for minimizing tariffs through negotiations with the United States. Other suggestions included support for expanding into new markets (13.6 percent) and increasing the range of duty-free items (13.1 percent).

A large majority of respondents, 81.3 percent, believe the U.S. tariff policy will negatively affect both South Korea and the United States. In addition, 84.0 percent expect the dispute to continue for over six months.

"Despite a temporary easing of tariffs between the U.S. and China, significant uncertainty remains," FKI said. "The government must develop negotiation strategies to eliminate non-tariff barriers and limit harm to Korean businesses."


박종민 기자 blick@donga.com