Half of the 10 domestic export manufacturing corporations predicted that "this year's supply chain procurement conditions will deteriorate compared to last year." The corporations noted that the negative impact of the United States' trade sanctions on the supply chain crisis is greater than that of China's raw material export controls.
The Korea International Trade Association's International Trade and Commerce Research Institute published a report titled "The Trump administration's second term: Implications and recognition of supply chain risk for our corporations due to U.S.-China export controls" on the 27th. The research institute conducted a survey related to the supply chain crisis from Feb. 24 to Mar. 10 for 740 manufacturing corporations with export performance exceeding $500,000 based on last year.
According to the survey results, 53.4% of corporations expect that global supply chain procurement conditions will deteriorate compared to the previous year following Trump's second term. The percentage of those who responded that supply chain procurement conditions would be "similar to last year" was 41.4%, while only 5.5% believed conditions would "improve."
By corporation size, mid-sized corporations (55.1%) and small and medium-sized enterprises (53.5%) appeared to be more concerned about the deterioration of supply chain conditions compared to large corporations (36.8%).
By industry, the crisis awareness was high in furniture and interior (76.9%) and textiles and apparel (65.4%). Concerns were also notable for secondary batteries (63.9%), automobiles and parts (60.7%), electric and hydrogen vehicles (54.5%), as well as steel and metals (55.8%), machinery and equipment (56.2%), and petrochemicals (56.4%), all of which were mentioned as targets of the Trump administration's tariff policy.
Export corporations indicated that they are more concerned about the trade sanctions from the United States than about China's raw material export controls. The percentage of those who deemed the U.S. sanctions "serious" was 79.6%, while it was 42.4% for the Chinese controls.
The need for adjustments to the supply chain due to U.S. sanctions also exceeded double that of the need for adjustments to Chinese sanctions, at 65.8% compared to 30.3%.
Seven out of ten export corporations (71.5%) identified the U.S. tariff measures on imported goods by country as a global issue expected to have negative impacts. Other concerns included the renegotiation of the Korea-U.S. Free Trade Agreement (51.2%) and additional tariffs by the U.S. on China (30.4%).
Eighty-three point one percent of corporations responded that they have experienced or expect supply chain damages due to U.S. reciprocal tariff imposition or trade sanctions. Seventy-three point zero percent indicated similar experiences or expectations regarding Chinese controls.
Major concerns included increased production costs (45.6%) and the rising need to secure alternative suppliers outside of China (28.1%).
However, more than half (51.8%) of the corporations have not established response measures. Only 17% of corporations are utilizing government supply chain support policies. The main reasons for not utilizing government assistance included "not knowing about the support information" (48.2%) and "not needing support measures" (28.7%).
Necessary government support identified included expanded financial support (60.0%), diversification of supply sources (42.3%), deregulation (29.2%), and research and development (R&D) support (23.6%).
Jin, a senior researcher at the Korea International Trade Association, emphasized, "Transactions with corporations subject to U.S. export controls are likely to lead to regulatory violations," adding that "special caution is required for direct and indirect transactions with those corporations."
It was pointed out that long-term measures need to be established for key mineral items, such as tungsten and rare earths, which heavily depend on China.
Jin noted, "As tensions between the U.S. and China escalate following Trump's second term, domestic corporations are experiencing dual challenges such as rising costs and concerns about supply disruptions," urging that "the government should establish guidelines and compensation systems to prepare for U.S.-China conflicts along with supporting the diversification of supply chains."