Latest news with #LeeJaeMyung
Yahoo
2 hours ago
- Business
- Yahoo
South Korea's Record Surplus With US Adds Strain to Tariff Talks
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown South Korea's current account surplus with the US surged to a record high last year, highlighting the challenge President Lee Jae Myung faces as he seeks to secure a trade deal with Donald Trump. The surplus reached $118.2 billion in 2024, the highest on record, the Bank of Korea said Friday. The figure has increased every year since 2019, reflecting deepening trade ties — and now potential friction — with Washington. The data serve as the latest reminder of the scale of South Korea's surplus with the US, with the Asian economy already on Trump's top 10 list of nations amplifying the US trade deficit. Lee, who secured the presidency earlier this month after protracted political turmoil following the impeachment of Yoon Suk Yeol, must now engage in trade negotiations with a US administration that favors hardline tactics and unilateral pressure. The two leaders were poised to talk on the sidelines of the Group of Seven summit in Canada this week, but the meeting was called off at the last minute as Trump left the event early amid rising tensions in the Middle East. Lee's nominee for prime minister said the Korean president is hoping to reach an agreement ahead of a July deadline that'll ramp up the baseline tariff rate the country faces. Exports remain vital to South Korea's economy, equivalent to more than 40% of gross domestic product last year. Its supplies of chips, smartphones, cars and batteries are also key elements for global supply chains. With so-called reciprocal tariff rates of 25% still on the table, the stakes for the negotiations are high. 'There's considerable uncertainty around how Trump or other nations will respond,' said Joonyoung Hur, an associate professor of economics at Sogang University. 'The impact on GDP could be significant, but it's hard to quantify with so many variables in play.' Hur estimates that such tariffs may shrink Korea's overall exports by 2%, adding that the maximum estimated impact on GDP growth could reach 0.7 percentage point. The US is Korea's second-largest export destination after China, accounting for 18.7% of outbound shipments worth $127.8 billion last year. The Office of the US Trade Representative said the country ran a $66 billion trade deficit with Korea in 2024, its eighth-largest bilateral gap. That was bound to draw the attention of Trump, who has framed persistent trade shortfalls as a national emergency. The reciprocal tariffs — if reinstated at 25% as announced on the so-called Liberation Day — could slash US-bound shipments by more than half, potentially dragging down Korea's GDP by over 1% by 2030, according to Bloomberg economist Hyosung Kwon. Even if Seoul manages to strike a deal, fallout may still follow. Closer alignment with the US could strain Korea's relationship with China, its biggest trading partner, which took in $133 billion worth of exports last year. Sector Implications Trade exposure underscores Korea's dependence on exports in a few key sectors. Semiconductor shipments totaled $141.9 billion in 2024, accounting for about 21% of South Korea's total exports, according to the Trade Ministry. Automobiles, the second-largest export item, exceeded 10%, while steel products neared 5%. Autos, which make up more than a quarter of Korea's exports to the US, are particularly exposed. Hyundai Motor Co., the country's top carmaker, faces greater risk than peers with local production due to its reliance on South Korean factories. It's already made efforts to mitigate that threat, announcing in March plans for a $21 billion investment in the US for vehicle production and other projects. Automobile exports are expected to be the most severely affected by US tariffs in both the short and long term, the BOK said in a May report. The central bank projected the nation's total goods exports to drop by 0.6%, with automobile shipments to the US sliding by as much as 4%. It also warned of longer-term risks as companies may relocate production to the US to avoid tariffs. Semiconductors have so far avoided direct sectoral tariffs, but face rising scrutiny as Washington considers broader tech-related trade measures. The US Commerce Department is expected to announce within weeks the results of its Section 232 investigations into industries deemed critical to national security, including semiconductors. Battery makers are also in the crosshairs. Despite building US-based joint ventures, South Korean firms rely heavily on components produced at home, exposing them to tariffs that could disrupt electric vehicle rollout plans for both South Korean and American automakers. In May, South Korea's trade surplus with the US fell to its lowest since July 2024, even as America's deficits with other Asian economies widened — a possible sign of shifting trade flows and strategic recalibration. South Korean companies in the automobile, semiconductor and battery industries invested billions of dollars to build out their supply chains in the US during the Biden administration in order to qualify for tax credits. Those investments are now poised to help partially shield them from Trump's tariffs, and may ultimately lead to a drop in goods exports from Korea to the US, narrowing the trade surplus. At the same time, growing direct investment by Korean firms in the US has led to increased income from dividends and interest, contributing to a larger surplus in the primary income account. Primary income also surged to a record last year, accounting for almost 16% of South Korea's surplus with the US, the BOK said. 'The impact of US tariff policy is gradually emerging,' Kim SungJun, director at the BOK's balance of payments team, said at a briefing Friday. 'And it is expected to become more pronounced in the second half of this year.' Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? 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? 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Straits Times
3 hours ago
- Politics
- Straits Times
New S. Korean President's call for public to suggest Cabinet members ‘more than a populist move'
South Korean President Lee Jae Myung mooted the crowdsourcing idea as a 'meaningful first step towards the people becoming the main actors in running the state'. PHOTO: AFP SEOUL - K-pop singer IU for Cultural Minister? How about Oscar-winning director Bong Joon-ho of the Parasite movie fame or even popular show host Yoo Jae-suk? A crowdsourcing exercise by the administration of the new South Korean President Lee Jae Myung, seeking public inputs towards the forming of its new Cabinet, has yielded these amusing results, along with more considered suggestions. Mr Lee, who took office on June 4, had mooted the crowdsourcing idea as a 'meaningful first step towards the people becoming the main actors in running the state'. The 62-year-old former human rights lawyer was elected on June 3 in a snap election after the ouster of former president Yoon Suk Yeol over the botched martial law attempt of Dec 3, 2024. Given the lack of a transition period unlike usual elections, Mr Lee has been working with the old Cabinet of his predecessor Yoon, while taking steps to form his own Cabinet. While the unusual crowdsourcing exercise is widely seen as a populist move, observers say that it is a shrewd decision by Mr Lee in more ways than one. 'Through this public nomination system, Mr Lee is able to not only cater to his supporters by giving them a voice, but also buy time to vet nominations thoroughly before formalising his Cabinet,' said Kyonggi University political science and law lecturer Hahm Sung-deuk. In his social media post on June 10 promoting the initiative, President Lee said that the process marks the beginning of a 'national sovereign government' and pledged transparency and fairness in ensuring that only 'truly qualified people' are selected. The public nominations were open from June 10 to 16, allowing South Koreans to submit their choice of Cabinet ministers, vice-ministers or heads of public institutions along with supporting reasons, via a dedicated website, a dedicated e-mail account and even through direct messages to Mr Lee's social media accounts. Self-nominations were accepted. By the closing date of the public nomination exercise, some 74,000 suggestions had been received, with the posts of health minister, justice minister and prosecutor-general receiving the most number of nominations. South Korean media reported that while there were throwaway nominations like suggestions that ex-president Yoon, a former prosecutor-general, return to the top prosecutor job, there were more considered nominations too. These included one for former director of the Korea Disease Control and Prevention Agency Jeong Eun-kyeong, who had led the nation through the Covid-19 pandemic, to be considered for the health minister position. The tight-knit medical community, in particular, had called for doctors to actively nominate medical field experts with good understanding of medical issues for the health minister position, in order to resolve the fall-out from the mass doctors' walk-out in February 2024 when the previous Yoon administration tried to unilaterally increase medical school admissions. This would be an example of political figures or influential people in various sectors of South Korean society mobilising their support bases to influence the outcome, said Sogang University's Associate Professor Hannah Kim. She also pointed out that there would inevitably be concerns that the selection process 'prioritises popularity over competence' although the public nomination process may appeal to voters 'frustrated by elite-driven decision-making and the revolving-door of establishment politics'. Such a nomination process many also deepen existing divisions, given the country's political polarisation driven in part by extreme fandom in both the opposing conservative and liberal camps, said Prof Kim. 'Moreover, President Lee is likely to face backlash regardless of which decision he makes – whether he goes with popular suggestions or ignores them and appoints allies or controversial figures . And with the latter, this could increase cynicism about democratic participation itself ,' she added. At a press briefing on June 16, a presidential spokesperson gave the assurance that the public nomination system is 'not a popularity contest', so the recommendations would only be for reference. The presidential office has said that the received nominations will be put through rigorous vetting first, with final nominations to be released later at an unspecified date. Prof Hahm says such a time-buying tactic is a smart political move by Mr Lee, who has already faced roadblocks in the formation of his government in his first week of office. 'It allows him to further scrutinise his future nominations, to make sure there are no more controversies to trip them up,' he said. A senior presidential aide was forced to resign four days after his appointment, after allegations surfaced of his undisclosed real estate holdings and a hefty 1.5 billion won (S$1.4 million) loan he allegedly took out using a friend's name. Mr Lee's pick for the prime ministerial position, Mr Kim Min-seok, has also come under intense scrutiny over his past conviction for accepting illegal political funds and his significant increase in assets over the last five years. Mr Kim, a seasoned lawmaker from Mr Lee's ruling Democractic Party (DP) who had warned about Yoon's possible martial law attempt as early as August 2024 and was a key strategist in Mr Lee's presidential campaign, has refuted the allegations and called them politically motivated attacks by the erstwhile ruling People Power Party (PPP) . The PPP, now the main opposition party, had staged a rally in Seoul on June 20 calling for the withdrawal of Mr Kim's nomination. Referring to Mr Lee's legal woe s that have been temporarily put on hold because of his presidency, a PPP spokesperson said: 'If both the president and the prime minister have moral issues and a history of criminal offences, we cannot expect proper appointments of public officials below them!' Mr Kim, who met the foreign press corps in Seoul on June 17, said that he understands the reasons behind the attacks and is optimistic that he will win the opposition over with his patience. 'However, even if I understand their opposition, that doesn't mean that the legal allegations that are untrue, are true. I would definitely address all of the issues and do my best to clear the nomination hearing,' said Mr Kim, whose parliamentary confirmation hearings will take place on June 24-25. Mr Lee himself has expressed confidence that Mr Kim would be able to 'explain himself sufficiently' . Pointing out Mr Kim's contributions during the martial law crisis and the ruling Democratic Party's majority in the Parliament, Prof Hahm said it was unlikely that Mr Kim's nomination would fail. He said: 'Do not forget that this is still the 'honeymoon' period for the president. His popularity is running high and people would not want anything to obstruct his presidency at this moment.' Wendy Teo is The Straits Times' South Korea correspondent based in Seoul. She covers issues concerning the two Koreas. Join ST's Telegram channel and get the latest breaking news delivered to you.
Japan Times
4 hours ago
- Politics
- Japan Times
Ishiba calls for expanding Japan-South Korea exchanges
Prime Minister Shigeru Ishiba has called for expanding exchanges between Japan and South Korea as this year marks the 60th anniversary of the normalization of diplomatic relations between the two neighboring countries. "We want to pass on the baton of exchanges we have nurtured to the next generation while further broadening the scope of Japan-South Korea cooperation," Ishiba said in a speech at a reception hosted by the South Korean Embassy in Tokyo on Thursday to commemorate the anniversary. Ishiba said that he had very good discussions with South Korean President Lee Jae-myung when they met in Canada on Tuesday on the sidelines of the Group of Seven summit. "As the strategic environment surrounding Japan and South Korea is becoming increasingly severe, let's take a new step toward a better future hand in hand," the prime minister stressed. Meanwhile, South Korean Ambassador to Japan Park Cheol-hee said that the bilateral relations have continuously deepened despite twists and turns in the past. Park called for further developing the friendly relations and continuing the efforts to make them sustainable. The reception was also attended by Fumio Kishida and Yoshihide Suga, both former prime ministers. Suga currently serves as head of the Japan-Korea Parliamentarians' Union.
Time of India
5 hours ago
- Business
- Time of India
South Korea says SK and Amazon to invest $5 billion in country's biggest data centre
South Korea's SK Group will invest around 7 trillion won ($5.11 billion), including $4 billion from Amazon Web Services , Amazon's cloud services provider, to build a data centre in the southern city of Ulsan , the Science Ministry said on Friday. The AI data centre , which will be the country's largest, will break ground in September and be fully operational with a capacity of 100 megawatts by 2029, the ministry said in a statement. SK Group Chairman Chey Tae-won said he planned to expand the data centre's capacity to one gigawatt in the future and make it a global hub that handles domestic AI demand during a meeting attended by President Lee Jae Myung and tech CEOs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like War Thunder - Register now for free and play against over 75 Million real Players War Thunder Play Now Undo Artificial intelligence was crucial for South Korea's growth, he said. "It may set a good example that South Korea's high-tech industry is possible not only in the metropolitan area but also in the provinces," Lee said. Live Events South Korea's AI-related stocks on Friday extended a rally on policy optimism, with SK Hynix rising more than 3%, Kakao surging 11%, and LG CNS gaining 9%, leading the benchmark KOSPI above a key milestone of 3,000 points for the first time in 3-1/2 years. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories The official announcement follows media reports earlier this month that SK Group and Amazon Web Services were building a data centre in South Korea. ($1 = 1,368.7600 won)
Reuters
9 hours ago
- Business
- Reuters
Morning Bid: Markets breathe easier as Trump hedges on Iran
A look at the day ahead in European and global markets from Stella Qiu So, President Donald Trump said we may need to wait two more weeks until he decides whether to launch a U.S. attack on Iran. In the meantime, markets are mostly breathing a sigh of relief but remain cautious over conflict in the Middle East. Brent crude oil prices fell 2.5% on Friday, erasing some of their recent gains but still on track for a 3.7% weekly rise, up for a third straight week. Falling oil prices appear to have given European stocks a reason to cheer, with EUROSTOXX 50 futures rising 0.7% and FTSE futures up 0.3%. Nasdaq futures and S&P 500 futures were both 0.2% lower. Some analysts have pointed to Trump's two-week deadlines for other key decisions, including in letters to U.S. trade partners on tariff negotiations, and the hope is that Tehran in the interim will be pressured to come to the negotiating table. Stocks were mixed in Asia on Friday, with Japan and Australia falling while China was higher. South Korea's share benchmark (.KS11), opens new tab outperformed with a jump of 1.1%, topping the 3,000 level for the first time since early 2022, after newly elected President Lee Jae Myung announced a stimulus spending plan. The U.S. dollar was also on the back foot, although it is set for a weekly gain of 0.5% on safe-haven flows spurred by the Middle East conflict. Still, one week of gains would not reverse the recent declining trend and many analysts expect the dollar's losses have further to run. China kept its benchmark lending rates unchanged on Friday as widely expected while data from Japan showed core inflation at a two-year high, keeping pressure on the Bank of Japan to hike rates again. Investors, however, doubt that such a move would come before December. Overnight, a number of central banks in Europe sent out dovish signals, including Norway's central bank which delivered its first rate cut since 2020. The Swiss National Bank cut rates to zero and did not rule out going negative, while the Bank of England held policy steady but saw a need for further easing. Key developments that could influence markets on Friday: -- Germany PPI data for May -- UK retail sales data for May -- ECB releases its economic bulletin
