A domestic smartphone component company, A, based in Vietnam, is currently facing significant difficulties due to the realization of U.S. President Donald Trump's "tariff bomb." A has been producing smartphone components, including camera modules, locally in Vietnam and supplying them to Samsung Electronics' plant in Vietnam. Smartphones equipped with these components are primarily exported to the U.S. market, meaning the smartphone components made by A are indirectly exported to the U.S.
The president of A noted, "The components of smartphones sold in the U.S. are also produced and exported from countries like China, Vietnam, and India, so just like other smartphone corporations from China, Japan, and Taiwan, we are equally affected by the tariffs caused by Trump," while also expressing concern that "the decrease in demand due to the product price increase from the tariff bomb is a worrying situation."
He said, "We are monitoring the current situation and reviewing response strategies with our clients," adding that "with the factory utilization rate in Vietnam at 70%, and considering labor costs in the U.S., it is impossible to build a new factory locally in the U.S."
B, a company producing industrial pumps in Gyeonggi Province, faces similar damage. B annually supplies industrial pumps to the U.S. through a Canadian company, but due to tariff uncertainty, there has been no news of export contracts as April approached. The scale of exports to Canada each year ranges from $700,000 to $1 million, approximately 10 billion won to 14 billion won. Although they have completed sample tests with new buyers in the U.S., there has been no progress.
Company C, a small and medium-sized enterprise producing semiconductor manufacturing equipment in South Chungcheong Province, is also being impacted by tariffs. C supplies semiconductor manufacturing equipment to a local subsidiary of a large domestic corporation in Mexico, but due to the imposition of U.S. tariffs, the delivery has been indefinitely delayed.
According to a comprehensive report from ChosunBiz on the 8th, the difficulties faced by domestic export small and medium enterprises are intensifying due to the tariffs imposed by U.S. President Trump.
The U.S. announced on the 5th that it imposed a 10% universal tariff on South Korea, followed by a 15% reciprocal tariff on the 9th. A total tariff of 25% will be applied. It will also impose a tariff of 46% on Vietnam, a key export base for South Korea.
South Korean small and medium enterprises, which have a high dependence on exports to the U.S., are expected to suffer significantly. According to the Ministry of SMEs and Startups, the share of U.S. exports from South Korean small and medium enterprises accounts for 16.3% of total exports. In 2024, the export value is projected to reach $18.74 billion, showing an 11.2% increase from the previous year, about 27.4 trillion won.
Experts are concerned that small and medium enterprises lacking the capacity to respond to the tariff policies of the Trump administration may face a serious crisis.
Yoo Hyung-sang, head of the Unicorn Management and Economic Research Institute, stated, "Even large corporations like Samsung and Hyundai are struggling to respond, and with the current high uncertainty, it is difficult for small and medium enterprises to proactively prepare for tariffs."
In fact, a survey conducted last month by the Ministry of SMEs and the Korea Federation of Small and Medium Enterprises among export companies of steel and aluminum products found that 41.8% responded that it is "difficult to accurately grasp the U.S. tariff policy."
The damage to export small and medium enterprises collaborating with large corporations is also expected to be significant.
Professor Cho Chun-han of Gyeonggi Science and Technology University stated, "If large companies declare they will absorb tariffs, like Hyundai Motor has promised not to raise prices until 2026, it could lead to situations where cooperating small and medium enterprises must lower their delivery prices."
Experts emphasize that government-level negotiations are crucial to minimize the impact of tariffs on small and medium enterprises.
Professor Cho noted, "When tariffs are applied, the global supply chain collapses, making it difficult for small and medium enterprises to respond on their own," and added, "Negotiations must be centered around the government."
There are also opinions that the crisis factors of tariffs should be transformed into opportunities through "export diversification." Currently, South Korea has a high dependence on exports to the U.S., China, and Vietnam. The combined exports from these three countries account for 42% of total exports.
Yoo emphasized, "Since tariffs apply not only to South Korea but also to other countries like Vietnam and China, there will be similar demands for export diversification. Just as China quickly targeted Europe, South Korea must also rapidly achieve export diversification."