[Aju News DB]
South Korean markets quickly got over the shock of a surprise election victory by Republic candidate Donald Trump Thursday, but policymakers and experts are concerned more about a trade war between Beijing and Washington.
The benchmark KOSPI showed a quick rebound after falling 2.25 percent a day earlier, amid predictions that Trump's victory would have a limited short-term impact on financial markets.
Trump has advocated strong protectionism, describing the Free Trade Agreement between Seoul and Washington that took effect in 2012, as a "destroyer" of US jobs, especially in the auto industry.
His protectionist tone sparked concern about South Korea's trade surplus with the United States that grew from $15.2 billion in 2012 to $25.8 billion in 2015.
But financial officials and analysts are more concerned about a Sino-US trade war as China has been mentioned as the first target of revised US policies. China and the United States are South Korea's leading trade partners.
"Trump's new policies that focus on expanding infrastructure and reactivating the manufacturing industry may provide a new business opportunity to us," Finance Minister Yoo Il-ho told a meeting of economic officials.
Hyun Jung-taik, president of the Korea Institute for International Economic Policy, told Yonhap News that Trump may first go after China on trade issues. "But there will be repercussions on South Korea as well, standing next to China and exporting similar products as China."
"We will be put in a difficult situation if US-China tension grows," Hyun said, adding that when Washington levies penalty on Chinese products for dumping, South Korean products get affected.
Jang Sang-sik, a researcher at the Korea International Trade Association, told a forum Thursday: "South Korea should closely monitor the direction of US trade policies as a considerable portion of its exports goes through China."
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
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