[Econ & Biz] How U.S.-China trade war could affect S. Korean companies 

미국의 대중국 규제 강화로 넓히는 무역전쟁… 한국 기업에 미치는 영향은?
The trade dispute between the United States and China rumbles on with Beijing being hit with wave of new sanctions, and Washington faces a possible retaliation.
Eyes are on how this could affect the global market, including South Korean firms.
Our trade correspondent Moon Hye-ryeon joins us in the studio to tell us more.
Welcome, Hye-ryeon.
Good evening, Jung-min.
So Hye-ryeon, could you begin by going through the new developments and why these new measures have been introduced?
Last week, the Biden administration announced steep tariffs for a number of different Chinese imports, and just last night, it announced that some of these new regulations will take effect starting in August.
The new measures are expected to affect some 18 billion U.S. dollars in imported Chinese goods, including electric vehicles, steel and aluminum, solar cells, and minerals and batteries.
Trade tariffs on EVs from China are being quadrupled from 25 percent to 100 percent, and chips face a doubling of the duties already in place to 50 percent.
"We're not going to let China flood our market, making it impossible for American automobile, auto manufacturers to compete fairly whilst implementing a 25% tariff on electric vehicle batteries from China and a 25% tariff on critical minerals that make those batteries.”
The White House said that the reasons for these new measures are to check China’s "unfair" trade practices that are "threatening" American businesses but with very few Chinese EVs being sold in the American market due to vehicle tariffs already in place, it’s mostly being seen as more of a political move.
And that’s not all - the following day, the U.S. government also announced that it will introduce regulations for Chinese-made connected vehicles, which are those that are able to exchange information wirelessly such as "smart cars" with autonomous driving and vehicles with wireless navigation software.
Washington expects to have a rule out this fall over concerns about personal data getting back to Beijing.
And how is this expected to affect South Korean firms --which industries are likely to be most affected by this trade dispute between the two countries?
There are mixed responses from the South Korean market, with some sectors expecting to not be as affected as others as a result of these new measures.
For example, take the chip industry - memory chips produced by domestic firms Samsung Electronics and SK hynix already account for more than half of the global market share, so they’re not expected to be as affected by these tariff hikes.
However, it's more complicated for other industries such as the EV sector, as it could go either way.
With higher tariffs on Chinese-produced vehicles, domestic companies could take advantage of this gap in the American market.
And this trend has already been seen in South Korea’s exports lately, with data from the Bank of Korea showing that the value of outbound shipments to the U.S. overtook those to China for the first time in 21 years in the first quarter of the year.
But one expert says that this is only temporary, as Washington seeks domestic production of goods.
“Until the construction of those factories are complete Korean firms may be able to export more to the United States but once those factories come online Korean companies may lose their advantage in the American market.”
Another factor that needs to be taken into account is how it could affect markets outside of the U.S.
“Chinese companies will not be able to sell in the United States or sell less in the United States, they will divert those exports to third markets like Europe or other Asian countries.”
This could lead to South Korean firms facing much tougher competition in these markets, especially for the steel industry - for companies such as POSCO and Hyundai Steel - that will have to compete with the much cheaper Chinese steel.
In that case, how has the government responded so far with regards to this and how are they planning to prepare for these possible impacts going forward?
For the time being, the government is responding and monitoring the situation through close communication with industry officials and Washington.
Last month, South Korea submitted a statement to the U.S. Department of Commerce to express its concerns regarding the uncertainty around how the country's firms could be affected....
#SouthKorea #UnitedStates #China #Trade #Firm #Businesses #대한민국 #미국 #중국 #무역 #기업 #Arirang_News #아리랑뉴스
📣 Facebook : / arirangtvnews
📣 Twitter : / arirangtvnews
📣 Homepage : v2.arirang.com/
2024-05-23, 18:00 (KST)