According to the trade agreement, the mutual tariff rate imposed by the United States on Korea will decrease from the previous 25% to 15%, but analyses suggest that Korea could effectively be the biggest victim.
According to Mirae Asset Securities on the 31st, Korea has effectively benefited from tariff-free treatment in trade with the United States due to the Korea-U.S. Free Trade Agreement (FTA). As of the end of last year, the effective tariff rate imposed by the United States on imports from Korea was approximately 0.2%.
However, with the inauguration of the Donald Trump administration in the United States, which introduced a tariff policy instead of the previous free trade approach, the situation has changed. As of the end of May, the effective tariff rate imposed by the United States on Korean imports has surged to 12.3%, marking an increase of over 50 times (approximately 4,966%) in just five months.
Kim Seok-hwan, a researcher at Mirae Asset Securities, noted through social media (SNS) that "the increase in Korea's effective tariff rate is a massive figure, reaching 17.6 times the overall average increase (282%)," adding that "it is even about 2.2 times higher than that of Singapore, which has the second-highest increase (2,306%)."
While the trade agreement has reduced uncertainty, the burden on the domestic industry is expected to increase further as the mutual tariff rate imposed by the United States on Korean products is 15%.
While there are specific differences among securities firms, it is commonly expected that the shipbuilding industry will benefit. Conversely, the automobile industry is likely to face negative impacts as it must compete at levels similar to those of Japan and the European Union (EU).
As of the 28th of this year, the United States has collected $125.6 billion in tariff revenue. This is an increase of 132% compared to the same period last year. Tariff revenue counts as part of the U.S. government's financial income. However, researcher Kim said, "It will be U.S. corporations and households that bear the burden of the tariffs."