A full-blown and protracted trade conflict between the two largest economies of the United States and China could shave South Korea’s exports by up to 0.5 percentage points next year, the central bank warned.
According to the Bank of Korea’s (BOK) report to the National Assembly on Thursday, the U.S.’s planned increase in tariffs on Chinese imports from 10 percent to 25 percent next year will have a negative impact on Korean exports. The U.S. implemented new 10 percent tariffs on about $200 billion of Chinese products on September 24 and plans to increase the level to 25 percent next year.
Last month, the BOK projected Korea’s exports will grow 3.2 percent next year after reflecting impact from deepening trade war between the U.S. and China and also downgraded its outlook for the Korean economy for this year and the next.
Korea’s exports will be largely hit by the trade war as intermediate products account for 78.9 percent of goods exported to China, which accounts for 24.8 percent of total exports. The BOK, in particular, projected a decline in shipments of electronic components and chemical products.
By Kim Yeon-joo and Lee Eun-joo
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