S. Korea may face 0.4% decline in real GDP if tariff effects are fully felt

With about 10 days left until the Trump administration's tariff deadline comes to an end, the South Korean government on Moday hosted a public hearing to address concerns and seek Seoul's potential negotiation strategy.

Our correspondent Park Jun-han was there.

South Korea may face a 0.3 to 0.4 percent decline in real GDP if tariff effects are fully felt.

This was mentioned during a public hearing held by the Ministry of Trade, Industry and Energy on Monday, based on a feasibility review conducted by the Korea Institute for International Economic Policy.

"If all the tariffs imposed or planned by the Trump administration were to materialize, our projections estimated that real GDP growth could decline by approximately 0.3% to 0.4%."

The hearing was held a day after trade ministry officials from the new Lee Jae Myung administration returned from high-level tariff negotiations in the United States last week.

The talks involved six areas of trade between South Korea and the U.S., namely, balanced trade, non-tariff measures, economic security, digital trade, country of origin, and commercial considerations.

People from various sectors, including agriculture, steel, automobiles and oil, gathered to express complaints and called for transparent disclosure of progress in the negotiations.

A general manager from the Korea Iron and Steel Association raised concerns, saying that the industry is particularly worried about the possibility of major competitors securing better terms — and whether that could further hurt Korea's steel exports.

Also, an official from the Korea Trade-Investment Promotion Agency, who appeared as a panelist to represent the voices of business leaders exporting to the U.S., urged the government to swiftly address the issue of uncertainty.

"It's not just Korean companies; U.S. firms are also clearly concerned about the tariffs. I believe that shared concern can be used as a bargaining chip, and we should strategically approach the tariff talks through Korea–U.S. business cooperation channels."

While the trade ministry expressed sympathy to industries affected by the tariffs, it explained that only limited information could be shared, as the potential harm of disclosing details of the negotiations outweighs the benefits.

"If you look at global or domestic media, there's very little information on which countries specifically received what demands and how they responded to certain tariff-related issues. I believe this is due to concerns over transparency, as making the negotiations public could be detrimental to the national interest."

Although the pace of negotiations is likely to pick up, it's still unclear when a deal will be reached — or what kind of tariffs might follow.

With less than 10 days left before the July 9 deadline, the tug of war between South Korea and the U.S. is expected to continue.

Park Jun-han, Arirang News.