Foreign investors likely to see South Korea's new leader as pro-business: Expert
Peter Kim of KB Financial Group talks about what new South Korean president Lee Jae-Myung's labor policies could look like, and why they are critical for the country's productivity.
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Yahoo
an hour ago
- Yahoo
Korea's Early Exports to US Jump Ahead of Tariff Deadline
(Bloomberg) -- South Korea's early trade data for June showed the biggest rise in exports to the US so far this year, indicating that manufacturers may have rushed shipments ahead of a July deadline that will see broad tariffs rates more than double. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports The value of shipments to the US rose 4.3% in the first 20 days of June from a year earlier, customs data showed Monday. It was the first increase since March, and it marked a rebound after a 8.1% drop in US-bound shipments in the full month of May. Imports rose 4.8%, while the trade surplus came to about $3 billion. As with other nations, South Korea faces sectoral tariffs on autos, steel, aluminum and semiconductors. An across-the-board 10% tariff on other South Korean goods is set to increase to 25% on July 9 after a three-month grace period expires. 'It does look like there was front-loading during the grace period, likely driven by pre-buying ahead of the US tariffs,' said Cho Yong-gu, a fixed-income strategist at Shinyoung Securities. 'I am, however, concerned about the sustainability of this trend — I expect a slowdown in the second half of this year.' The rebound in Korean shipments to the US is likely to be short-lived. President Lee Jae Myung, who took office earlier this month, has yet to make meaningful progress in trade negotiations. A planned meeting with President Donald Trump on the sidelines of last week's Group of Seven summit in Canada was called off at the last minute. The trade figures add to signs of a temporary recovery in regional demand. Japan's manufacturing PMI climbed back into expansion in June, rising to 50.4, the highest since May 2024, S&P Global said Monday. The rebound may also offer modest support for Korea's intermediate goods exports to Asia. South Korea's overall value of shipments rose 8.3% in the first 20 days of June, the biggest jump since August 2024, the customs data showed. Imports rose 5.3%, resulting in a trade surplus of $2.62 billion. The elevated tariff rate on South Korean goods would represent one of the steepest trade penalties imposed on US allies. On top of that, the sectoral duties will further strain the country's export-dependent industries. Last Friday, the Bank of Korea reported that South Korea's current account surplus with the US surged to a record high last year, adding pressure on President Lee as he seeks to secure a trade deal with Washington. Trade Minister Yeo Han-koo departed on Sunday for meetings with his counterparts in Washington, Yonhap News reported. In Monday's data, semiconductors, South Korea's largest export, posted a 21.8% increase, while automobile shipments climbed 9.2%. Steel exports showed a modest 1.6% increase, remaining weak under the pressure of the 50% US tariff. Outbound shipments to China slipped 1%, while imports gained 3.4%. Exports to Vietnam recorded a 4.3% decline, whereas shipments to the European Union surged by 24%. The trade data come after the Finance Ministry announced a 30.5 trillion won ($22.2 billion) supplementary budget to help revive an economy hit by weak consumption and external trade shocks. The package includes 15.2 trillion won in stimulus, 5 trillion won for supporting livelihoods like small businesses and 10.3 trillion won to offset a revenue shortfall in the current budget. The extra budget will be financed through a combination of spending cuts and additional debt issuance, lifting the debt-to-gross domestic product ratio to 49% this year. Policymakers are seeking to balance economic support with fiscal sustainability, while also navigating heightened trade tensions. The BOK pivoted to a monetary easing cycle last October, and has since cut its benchmark rate to 2.5%. The bank lowered its growth forecast for the year to 0.8% and said further easing may be on the table depending on conditions in the second half. With a new government in place and fiscal tools being deployed, attention remains on whether export momentum can recover, and whether a breakthrough with the US can be made before the tariff relief expires. (Updates with other details including economist's comments.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
4 hours ago
President Lee picks South Korea's first civilian defense chief in 64 years
SEOUL, South Korea -- South Korean President Lee Jae Myung nominated a five-term liberal lawmaker as defense minister Monday, breaking with a tradition of appointing retired military generals. The announcement came as several prominent former defense officials, including ex-Defense Minister Kim Yong Hyun, face high-profile criminal trials over their roles in carrying out martial law last year under then-President Yoon Suk Yeol, who was indicted on rebellion charges and removed from office. Ahn Gyu-back, a lawmaker from Lee's Democratic Party, has served on the National Assembly's defense committee and chaired a legislative panel that investigated the circumstances surrounding Yoon's martial law decree. Yoon's authoritarian move involved deploying hundreds of heavily armed troops to the National Assembly and election commission offices in what prosecutors described as an illegal attempt to shut down the legislature and arrest political opponents and election officials. That sparked calls to strengthen civilian control over the military, and Lee promised during his election campaign to appoint a defense minister with a civilian background. Since a 1961 coup that brought military dictator Park Chung-hee to power, all of South Korea's defense ministers have come from the military — a trend that continued even after the country's democratization in the late 1980s. While Ahn will face a legislative hearing, the process is likely to be a formality, since the Democrats hold a comfortable majority in the National Assembly and legislative consent isn't required for Lee to appoint him. Among Cabinet appointments, Lee only needs legislative consent for prime minister, Seoul's nominal No. 2 job. 'As the first civilian Minister of National Defense in 64 years, he will be responsible for leading and overseeing the transformation of the military after its mobilization in martial law,' Kang Hoon-sik, Lee's chief of staff, said in a briefing. Ahn was among 11 ministers nominated by Lee on Monday, with longtime diplomat Cho Hyun selected as foreign minister and five-term lawmaker Chung Dong-young returning for another stint as unification minister — a position he held from 2004 to 2005 as Seoul's point man for relations with North Korea.
UPI
5 hours ago
- UPI
South Korea's President Lee orders emergency response for 'urgent' Middle East crisis
SEOUL, June 23 (UPI) -- South Korean President Lee Jae Myung on Monday instructed government ministries to operate under an emergency response system in the wake of U.S. strikes on Iran's nuclear sites, his office said. In his first meeting with senior aides since taking office earlier this month, Lee called the Middle East situation "very urgent" and ordered safety measures for South Korean citizens in the region as the Israel-Iran conflict intensifies. He also directed ministries to address the economic fallout from the Middle East crisis, including adding measures to an upcoming supplementary budget, if necessary. "Due to this growing uncertainty, the economic situation -- especially the foreign exchange, financial and capital markets -- is becoming considerably unstable," he said. "I am concerned that inflation will start again due to an increase in oil prices," he added. On Sunday, the president's office announced that he would not travel to the Netherlands this week to meet with NATO leaders due to the situation in the Middle East. Lee had been considering attending the NATO Summit, which will take place on Tuesday and Wednesday in The Hague, to discuss tariffs and defense cost-sharing with U.S. President Donald Trump. After the U.S. bombing of three nuclear sites in Iran this weekend, however, Lee canceled plans, citing the growing uncertainty in the region. "Despite the many pending national issues since taking office, the president has been actively considering attending the NATO summit," spokeswoman Kang Yoo-jung said in a written briefing on Sunday. "However, considering various domestic issues and uncertainties due to the Middle East situation, he has decided that it is impossible for him to attend in person," Kang said. Trump is pressuring NATO member states to increase defense spending to 5% of GDP. U.S. Defense Secretary Pete Hegseth last week said that Asian allies such as South Korea should also reach the target, prompting Seoul to assert that its defense spending is already "very high" compared to other countries. National security adviser Wi Sung-lac will represent South Korea at the NATO gathering in Lee's place, the presidential office said in a written briefing Monday afternoon. Other South Korean officials have voiced concerns about the security and economic impacts of the latest escalation in the war between Iran and Israel. Acting Finance Minister Lee Hyoung-il on Monday warned of heightened volatility in global financial and energy markets after the U.S. involvement in the conflict. "Following the U.S. airstrikes, Iran's parliament passed a motion to close the Strait of Hormuz, highlighting the significant uncertainty surrounding the situation," Lee said, according to news agency Yonhap. "Global oil prices have already opened 2 to 3% higher today, signaling increased volatility in international energy markets."
