South Korea preparing for US trade war fallout

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South Korea is preparing for a hit to its economy as a result of US tariffs on China, over concerns that companies exporting electrical components could suffer as a result of Washington’s trade policies.

A statement from South Korea’s Ministry of Trade, Industry and Energy on Thursday said the government and Korean industries would prepare “a joint response because there is a possibility of the US-China trade dispute dragging on for some time.”

According to Global Times, Seoul is particularly concerned about “South Korea's exports of "intermediate goods" used in home appliances, computers and communications devices.”

China’s Ministry of Commerce said on Thursday the trade war launched by the US is global, and not only with China, adding that the US was antagonizing the whole world, with policies which will drag the global economy into jeopardy.

The Trump administration is also threatening 25 percent tariffs on auto imports from South Korea, a move that could shake the world’s sixth largest vehicle producer. One third of the 2.53 million South Korean vehicles sold overseas in 2017 went to the US.

South Korean Finance Minister Kim Dong-yeon on Thursday called for a series of measures to boost domestic demand in the wake of poor economic data and uncertainty over global trade, saying “job creation numbers are not good, and the situation is the worst since the financial crisis.”

South Korea’s manufacturing sector shed 120,000 jobs in June, marking a third consecutive month of decline.

10.5 percent of people aged between 15 and 29 were unemployed as of May, a year-on-year increase of 1.2 percent.

Concerns over the country’s ageing population and youth unemployment have seen President Moon Jae-in pledge 14.9 trillion won (13.3 billion US dollars) towards job creation in the past two years, calling the jobless rate among young adults a national disaster, according to Yonhap News Agency.

(Top picture: Shipping containers sit stacked in the Busan Port Terminal (BPT) in Busan, South Korea. /VCG Photo)