Stock market in Seoul sees upward movement despite uncertainties surrounding American tariffs
South Korea and US Tariff Negotiations Reach Critical Phase
The ongoing tariff negotiations between South Korea and the United States are approaching a critical deadline of August 1, with a 25% reciprocal tariff threatened by the US looming if no deal is reached.
The trade talks have been tense, with South Korea facing significant pressure from the US to open its agricultural and livestock markets further. US officials have also reportedly linked trade talks to enhanced defense cooperation and arms purchases.
To avert these tariffs, South Korea has proposed a major multibillion-dollar investment package in US shipbuilding, labeled the "Make American Shipbuilding Great Again" (MASGA) initiative. This proposal includes capital investments by South Korean shipbuilders in the US, supported by financial backing from Korean public institutions like the Export-Import Bank of Korea.
The negotiations are compounded by South Korea’s intent to protect domestic industries and limit concessions despite US pressure. Compared to other US trade partners like Japan and the EU, South Korea remains isolated in these talks due to the looming tariffs and the lack of an agreement.
The imminent tariff threat and trade uncertainties have likely created market volatility and investor caution, especially in sectors tied to exports affected by tariffs such as shipbuilding and agriculture.
In the South Korean stock market, the Korea Composite Stock Price Index gained 6.01 points, or 0.19 percent, to 3,196.46 in the first 15 minutes of trading on Friday. However, some individual stocks, such as Hanwha Ocean and LG Energy Solution, saw decreases of 1.35 percent and 1.63 percent, respectively.
Key South Korean ministers are scheduled to meet US counterparts shortly, suggesting potential last-minute developments before the deadline. Trade Minister Yeo plans to hold a one-on-one meeting with US Trade Representative Jamieson Greer as part of efforts to make progress in tariff talks.
The two sides reaffirmed their commitment to striking a trade deal before the Aug. 1 deadline, but the "2+2" high-level meeting, originally scheduled for Friday, was postponed.
Meanwhile, the tech sector saw mixed results. Nvidia rose 1.73 percent on expectations of profiting from major tech firms' increased AI investment. Samsung Electronics dipped 0.45 percent, while SK hynix increased by 1.11 percent. Tesla slid 8.2 percent due to weaker-than-expected earnings.
In the financial sector, Shinhan Financial rose by 3.75 percent, KB Financial increased by 6.06 percent, and Hana Financial advanced by 3.63 percent. POSCO Holdings decreased by 1.05 percent, while HD Hyundai Heavy went up 1.67 percent.
This situation remains fluid, and further developments are expected in the coming days. Investors and market participants will be closely watching the outcome of the August 1 deadline, with potential downside risk if tariffs are imposed.
- The ongoing tariff negotiations between South Korea and the United States might significantly impact the tech sector, as South Korea's proposed investment package primarily targets the US shipbuilding industry, but potential tariffs on South Korean exports like technology products could also be a concern.
- In theSouth Korean financial sector, while some companies such as Shinhan Financial, KB Financial, and Hana Financial saw gains, the stock prices of Hanwha Ocean and LG Energy Solution, which are affected by tariffs, declined, indicating investor uncertainty and caution amid the tariff negotiations.
