Trump's Second Term Begins: What’s the path forward for South Korea's economy?

Welcome to Within The Frame, where we bring you today's most pressing issues from across the globe, I'm Kim Mok-yeon.

U.S. President Donald Trump is moving forward with his tariff agenda.

He announced plans to impose a 10% tariff on Chinese goods starting February 1, citing China's role in fentanyl trafficking to Mexico and Canada.

This follows his earlier decision to impose a 25% tariff on imports from Mexico and Canada, also effective February 1, as part of his broader efforts to combat drug flows and illegal border crossings.

While Trump has delayed announcing broader universal tariffs, economies around the world are keeping close tabs as the measure is expected to have wide-ranging impacts on global trade, including potential effects on domestic businesses.

For more on the impact of Trump's economic policies, we invite Hwagyun Kim, Professor of Banking and Finance at Texas A&M University, Mays Business School. Welcome.

Also joining us is Oh Joon-seok, Dean of the College of Economics and Business at Sookmyung Women's University. Great to have you with us again, Professor.

(KIM) 1. So let's start with Professor Kim, although President Trump stated he would sign an executive order on universal tariffs on his first day in office, there was no mention of specifics in his inauguration speech. What do you think is the reason for this?

(OH) 2. Following the news, the Korean won-dollar exchange rate has fallen to around 1,430 won in just one month. Some analysts suggest this may be due to expectations that Trump will adopt a more relaxed tariff policy. Professor Oh, Do you think the strong dollar trend will ease?

(OH) 3. Trump has postponed the universal tariff policy for now, stating it's not yet ready, but if he proceeds with it, when do you think it will happen? What impact would this have on South Korean companies Professor Oh?

(KIM) 4. While Trump has postponed the universal tariff, he has started to specify tariff pressures on Mexico, Canada, and China. On February 1st, the U.S. will impose a 25% tariff on Canada and Mexico. Professor Kim, What is the background behind this? Is this a card for renegotiating the U.S.-Mexico-Canada Agreement?

(OH) 5. Many South Korean companies have entered Mexico and Canada as key gateways to the North American market. If the U.S. imposes the 25% tariff as planned, what impact will it have on South Korean companies Professor Oh?

(KIM) 6. President Trump has stated that he is considering a 10% tariff on China starting February 1. During the election campaign, he promised to impose tariffs of up to 60% on Chinese products. Professor Kim, How do you foresee the future of the U.S.-China tariff war?

(OH) 7. In response to Trump's tariff threats, what measures should the South Korean government take to minimize the damage? What are the ways to strengthen export capabilities Professor Oh?

(KIM) 8. Many analysts suggest that the policies of the Trump 2.0 administration may worsen U.S. inflation. Given the current trends in prices Professor Kim, how do you assess Trump's immigration expulsion policies and the declaration of a national energy emergency as mentioned in his inauguration speech?

(OH) 9. There is speculation that the Federal Reserve may keep the key interest rate unchanged until the end of the year due to Trump's inauguration. Professor Oh, What do you expect the outcome to be in the upcoming FOMC meeting next week?

(KIM) 10. Meanwhile, there is no significant mention of cryptocurrency-related policies in Trump's inauguration speech or executive orders, and Bitcoin, which had fallen below $101,000 on inauguration day, is now showing signs of recovery. Professor Kim, What is your outlook for Bitcoin under the Trump 2.0 administration?