00:00On January 26,
00:242016, former U.S. President Donald Trump took to Truth Social and announced a sharp tariff
00:32hike on South Korean invoices. The new rate? 25%, up from 15%. The targets? Autos, pharmaceuticals,
00:41and lumber. And the reason? What Trump called South Korea's failure to live up to a trade deal.
00:48This wasn't a formal policy briefing. It was a post. But the message was loud,
00:54and markets heard it. So why does this matter? South Korea is one of America's most important
01:02trading partners. Its economy is deeply export-driven, and the U.S. is a key destination.
01:10In fact, total U.S.-South Korea goods trade hit nearly $200 billion last year. But it also left
01:17the U.S. with a $66 billion trade deficit. And that deficit has long been a target of Trump's trade
01:27strategy. The immediate impact was fast. Shares of major South Korean companies, including Hyundai,
01:36the U.S. has dropped. Investors feared one thing, loss of competitiveness in the U.S. market.
01:44This comes at a sensitive time. Earlier tariff pressures in 2025 already led to flat export values
01:52and a 0.4 percent drop in export volumes. Now, economists warn this move could slow GDP growth
02:02and create a negative income effect across key sectors. Let's break down the sectors hit hardest.
02:09Automotive first. South Korean cars from Hyundai to Kia just got more expensive in America.
02:20That means lower sales, tighter margins, and potential job losses back home.
02:27Pharmaceuticals next. Higher tariffs could raise drug prices in the U.S.,
02:33while squeezing South Korean exporters in a fast-growing industry. And lumber. A key input for
02:42construction now caught in the crosshairs, adding pressure to already fragile supply chains.
02:50And if tensions escalate, semiconductors and electronics could be next. But this story
02:57doesn't end with South Korea. Trump has also signaled similar pressure on Canada, sending a clear message
03:05to allies and rivals alike. Comply or pay. For Japan, the EU, and emerging markets, this could accelerate
03:15a shift away from U.S. trade dependence, pushing new regional deals, especially in Asia.
03:21In Asia. Globally, the risk is familiar. Higher costs, disrupted supply chains, and escalating trade tensions.
03:32Bottom line. One posts, one policy signal, and a reminder that in today's world, trade wars can restart
03:40in real time. And this time, the ripple effects may be just getting started.
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