[Econ & Biz] What Trump's April 2 tariffs mean for S. Korea amid its leadership vacuum

On top of Trump's new tariffs that are set to take effect a week later,. the American leader has made it official to impose 25-percent tariffs on car imports to the U.S.

We delve into its potential impact on businesses here in Korea.

Our correspondent Lee Soo-jin is here in the studio.

Soo-jin, what can we expect the tariffs to look like for Korea?

Not all of the key details have been revealed as of yet,

but it's growing more likely that South Korea will be significantly impacted by the tariffs.

U.S. President Donald Trump announced on Wednesday local time that he would impose 25 percent tariffs on foreign-made cars and auto parts, set to take effect on April 2nd, with the U.S. beginning to collect the duties the following day.

The tariff plan will inevitably significantly impact South Korea, as automobiles are the country's top export item to the U.S.

Amounting to 34-billion U.S. dollars last year and accounting for more than 49-percent of the total automobile exports.

Here's how the tariffs will impact Korea's auto industry, according to an expert.

"This auto tariff will have a major impact on South Korea, as automobiles are a key export. But since it applies to all imported cars, other global automakers will also be affected. The bigger concern is the reciprocal tariffs set for early April, potentially adding further costs for South Korean automakers."

Reciprocal tariffs are set to be announced on April 2nd,.. when the Trump administration is expected to assign each country a reciprocal tariff "number" that corresponds to tariffs and other trade barriers on U.S. products.

Just last week, U.S. Treasury Secretary Scott Bessent cited 15 nations, which he called the "Dirty 15," for imposing high tariffs on the U.S.

While he did not clarify which nations, Trump has previously singled out South Korea for its trade surplus with the U.S.

Let's take a listen to what an expert said was the reason behind South Korea's rise in export share to the U.S.

"Since the pandemic, the United States was the virtually the only major country which had very strong demand so exports to the U.S. rose especially for manufactured durable goods. Korea was not one of the top ten countries which had trade surplus with the United States but now it's ranked eighth so that kind of change puts Korea in Trump's target range."

What's being done on the corporate front as to U.S. tariffs?

The private sector has been working tirelessly to protect South Korea's trade interests.

On Monday, U.S. President Donald Trump announced that he "may give a lot of countries breaks" on the reciprocal tariffs.

This comes as Trump met with Hyundai Motor Group Executive Chairman Chung Eui-sun at the White House on Monday.

There, Chung announced that South Korea's largest automaker will be investing 21 billion dollars in the United States through 2028.

And the investment will give Hyundai Motor Group a pass from Trump's tariff policies.

Let's take a listen.

"Hyundai will be producing steel in America and making its cars in America. And as a result, they'll not have to pay any tariffs. You know, there are no tariffs if you make your product in America."

This has raised speculation about further U.S. investment by major chip firms like Samsung Electronics and SK hynix.

POSCO announced that it's considering investing in the U.S. upstream process, the initial stage of steel production.

And according to an expert, here's how these investments may influence Trump's tariff decisions.

"With reciprocal tariffs varying by country and product, Hyundai Motor's investment is expected to benefit South Korea overall. If Korean firms face the same tariffs as their global competitors, there would ultimately be no competitive disadvantage."

How are the authorities responding?

With tariff developments continuously unfolding,

the government has been actively working to mitigate their impact on South Korean industries.

In response to the auto tariff announcement, Industry Minister Ahn Duk-geun held an emergency meeting on Thursday where he said that the government will prepare a plan for the auto industry that will be unveiled sometime in April.

And it comes amid Alaska governor Mike Dunleavy's visit to Korea, where he urged Korean investment in Alaska's 44 billion dollar LNG project, a move seen as a way to narrow the U.S. trade deficit with South Korea.

But a major variable in the government response is the result of the ongoing impeachment trial.

Let's take a listen.

"If upheld, the impeachment will bring new leadership and a clearer political stance. If dismissed, the current government, with three years of experience, will continue. Either way, a swift trial decision is crucial to reducing trade uncertainty."

All right,.. we'll continue monitoring developments from both the U.S. and South Korea.

Thank you for your report, Soo-jin.

Thank you for having me.