Korea feared to take hit from global trade row

Published : Mar 6, 2018 - 09:47 Updated : Mar 6, 2018 - 09:47

A looming global trade war is feared to deal a blow to corporate Korea as Asia's fourth-largest economy banks heavily on exports for its economic growth, analysts said Tuesday.

The world's three major economic powerhouses are locking horns with one another after US President Donald Trump has threatened high tariffs on imports of steel and aluminum.

China, the world's second-largest economy, is reportedly mulling retaliatory duties on American farm imports, with the European Union said to be preparing to follow suit.

(Reuters-Yonhap)

According to data from the Korea International Trade Association, the three economic giants took up more than 46 percent of South Korea's total exports in 2017.

South Korean exports to China came to $142.1 billion last year, or a quarter of its total overseas shipments. America came next with $68.6 billion (12 percent), followed by the EU with $54 billion (9.4 percent).

Given Seoul's high dependence on exports for its economic growth, South Korea is feared to emerge as the biggest victim of a full-fledged trade war among the three parties.

As of 2017, exports accounted for nearly 69 percent of South Korea's gross domestic product. The country's overseas shipments hit a fresh high of $573.7 billion last year.

KITA said a possible trade dispute among the three parties is likely to hit not only exports of South Korean finished products but also intermediate goods.

Indeed, intermediate goods accounted for about 79 percent of South Korea's total exports to China. Comparable figures were 58 percent for Germany, 54 percent for France and 50 percent for the US

"A trade row among major export markets is feared to come as a big risk for South Korea's exports of intermediate products," said Moon Byung-ki, a senior KITA researcher. "Last year, intermediate goods took up 66 percent of South Korea's total exports." (Yonhap)