IM noted that the tariff policy of the Donald Trump administration would lead to a rise in global prices. Corporations have stated they will maintain prices despite tariff increases; however, in the long term, price hikes are unavoidable. The point at which the economic recession recovers has been pointed out as after the second half of this year.
Research Institute Lee Woong-chan of IM released a report titled 'Avante 50 million won, iPhone 5 million won' on the 7th, stating, "Hyundai Motor Company announced it would freeze prices for two months, but it will be difficult to maintain those prices thereafter" and added, "This is also true for U.S. automotive corporations."
President Trump referred to the 2nd as 'Freedom Day' when announcing mutual tariff policies with most countries around the world. Previously, as the tariff imposition policy had continually shifted direction, the financial market regarded the announcement as resolving uncertainty; however, the market reacted sharply to higher than expected tariffs. In particular, China is facing retaliatory tariffs with a 54% imposition.
This research institute mentioned that the current tariff policy would raise prices globally, stating, "Tariffs will ultimately be passed on to U.S. consumers in some form, leading to a decrease in consumption."
This research institute also projected that the price of the iPhone, most of whose production takes place in China, could rise to $3,800 (approximately 5 million won), and stated, "As a result of the tariffs, retail sales may see a temporary surge followed by a sharp decline, while corporate activities will contract, and exports and manufacturing activities will significantly slow down."
This research institute analyzed that the tariff policy aims to cool the U.S. economy and lower interest rates. However, with excessive tariffs, the U.S. could alienate allies in Asia and Europe, resulting in a rapid onset of the Trump administration's lame duck period.
The export-oriented domestic economy is also expected to be significantly affected. In particular, corporations that have established production bases in Southeast Asia, including Vietnam, could suffer.
For this year's stock market, it was projected that after a correction centered on technology stocks in the first quarter, there would be an adjustment in the second quarter due to the implementation of tariffs and an economic downturn, followed by a rebound in the second half due to a Federal Reserve interest rate cut. However, the analysis suggested that the stock market adjustment is significantly influenced not only by tariffs but also by the overvaluation of the U.S. stock market.
This research institute stated, "Once the economic downturn is reflected in the data, Federal Reserve Chairman Powell will also mention interest rate cuts," adding, "While there needs to be consideration regarding the timing of purchases, more time is still needed."