Latest news with #JihoonLee
Yahoo
19-06-2025
- Business
- Yahoo
South Korea drafts second extra budget as new leader seeks to spur growth
By Jihoon Lee SEOUL (Reuters) -South Korea's new administration proposed on Thursday $14.7 billion of extra government spending to support sluggish domestic demand, as President Lee Jae Myung makes economic recovery his top policy agenda. The supplementary budget plan totalling 30.5 trillion won announced by the finance ministry includes 20.2 trillion won ($14.7 billion) of new spending to spur economic growth and support vulnerable sectors, while it will also make up for 10.3 trillion won from an expected shortfall in tax revenue. The second extra budget of the year comes two weeks after Lee, who has vowed expansionary fiscal policy, won a snap presidential election on June 3 and less than two months since the first supplementary budget of 13.8 trillion passed in May. "The economic downturn is very serious, and it is time for the government to play a role," Lee said. South Korea's central bank last month slashed its economic growth forecast for this year to 0.8% from 1.5%, citing heightened uncertainty over U.S. tariffs, as it lowered interest rates for a fourth time in its current easing cycle and signaled more rate cuts. Asia's fourth-largest economy unexpectedly contracted in the first quarter amid U.S. President Donald Trump's sweeping tariffs and domestic political turmoil sparked by former President Yoon Suk Yeol's martial law decree in December. The biggest spending will be Lee's flagship policy of a universal cash handout scheme for consumers, providing 150,000-500,000 won in vouchers to every citizen and totalling 10.3 trillion won. Most people, or 84% of some 51 million eligible recipients, will be offered 250,000 won (about $180), while others will be given more or less depending on how much income they make. Lee was one of the first to introduce a cash handout scheme in South Korea when he was mayor of Seongnam City, which was adopted nationwide several times during the COVID-19 pandemic under the previous liberal administration of Moon Jae-in, even as critics questioned the effectiveness of the policy. Other spending plans include financial support for the construction sector, investment in artificial intelligence as well as small and medium-sized enterprises, and debt restructuring programmes for small businesses. Out of the combined total of 30.5 trillion won, 19.8 trillion won will be financed by issuing additional treasury bonds, according to the finance ministry. The second extra budget will raise the country's fiscal deficit to 4.2% of gross domestic product (GDP) this year, up from the previous estimate of 3.3% after the first extra budget, and government debt to 49.0% of GDP, from 48.4%. The government will submit the proposal to parliament, controlled by the left-leaning ruling Democratic Party, on June 23. ($1 = 1,380.2500 won)
Yahoo
29-05-2025
- Business
- Yahoo
South Korea May exports expected to fall as US tariffs offset robust chip demand
By Jihoon Lee SEOUL (Reuters) - South Korea's exports are expected to have fallen in May for the first time in four months, as the impact of U.S. President Donald Trump's tariffs offset strong demand for semiconductors, a Reuters poll showed on Thursday. Exports out of Asia's fourth-largest economy are forecast to have fallen 2.7% this month from a year earlier, according to a median of 16 economists. That would be the first year-on-year decline since January. South Korea - the first major exporting economy to report trade figures each month - is scheduled to release data for May on Sunday, June 1, at 9 a.m. (0000 GMT). In April, exports unexpectedly rose 3.7%, even as U.S.-bound shipments dropped 6.8%. Robust chip sales, especially those of high-end products for artificial intelligence, offset declines in cars hit by Trump's tariffs. "Semiconductor exports have been stronger than expected in May, but that might be due to advance orders amid worries about U.S. tariffs on chip imports," said Chun Kyu-yeon, an economist at Hana Securities. In the first 20 days of this month, exports fell 2.4%, with shipments to the U.S. dropping 14.6% and those to China declining 7.2%. Trump has imposed 25% duties on imports of automobiles and steel products and suggested more duties on semiconductors and pharmaceuticals. His reciprocal tariffs announced in early April, including 25% levies on South Korea, are currently on pause for negotiations, except the 10% baseline. In May, Washington and Beijing agreed to pause their trade war by unwinding most of the tariffs on each other's goods for 90 days. "What is concerning is that we are seeing declines in exports not only to the United States, but also to China, suggesting a slowdown in global trade," said Stephen Lee, an economist at Meritz Securities. Lee expects South Korea's exports to fall in the second quarter, after they declined for the first time in 1-1/2 years in the prior quarter. "It is still too early to declare a clear easing of tariff risks," said Oh Suk-tae, an economist at Societe Generale, noting uncertainty around the July 9 and August 12 deadlines for the 90-day pause on reciprocal tariffs and a truce with China. South Korea's imports are projected to have fallen 3.1% in May, after dropping 2.7% in April, according to the survey conducted on May 19-28. The median estimate for the country's trade balance stood at a surplus of $4.61 billion, compared with $4.88 billion in the previous month. 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
Yahoo
16-05-2025
- Business
- Yahoo
South Korea minister asks for exemption from US tariffs at Greer meeting
By Jihoon Lee SEOGWIPO, South Korea (Reuters) -South Korea's minister of trade and industry Ahn Deuk-geun said on Friday that he met U.S. Trade Representative Jamieson Greer and asked again for a waiver from Washington's tariff measures. Ahn also said the South Korean delegation would visit the United States next week for technical talks as part of tariff negotiations, which are due to focus on balanced trade and non-tariff barriers among other issues. The bilateral meeting between Ahn and Greer was held on the sidelines of a two-day gathering of trade ministers from 21 member economies of the Asia-Pacific Economic Cooperation (APEC) grouping in South Korea's resort island of Jeju. It was the second senior-level trade talks between South Korea and the United Sates, after the opening round of negotiations held in late April jointly with then South Korean Finance Minister Choi Sang-mok and U.S. Treasury Secretary Scott Bessent, where they agreed to craft a trade package by July. The package is expected to encompass four main areas: tariffs and non-tariff measures, economic security, investment cooperation, and currency policy. While touting cooperation in shipbuilding as an important card for negotiations, South Korea has denied that defence costs for some 28,500 U.S. troops stationed in the country will be included. Just a week after the April meeting, however, South Korea's Prime Minister Han Duck-soo, who had been leading negotiations, resigned, followed by Choi stepping down, raising questions over the progress in trade talks. Currently, South Korea's interim leader is the education minister until a new president is elected on June 3. After U.S. President Donald Trump slapped 25% tariffs on South Korea in April, Seoul was one of the first countries to hold face-to-face talks with Washington, soon after Japan. U.S. Commerce Secretary Howard Lutnick said, however, in an interview with Bloomberg News last week that trade deals with the two Asian allies would not be "fast deals". "Washington is prepared to move forward in the interim talks, given the range of interests that could be addressed in a potential negotiated agreement," said Jay Truesdale, a former U.S. diplomat and CEO of TD International, a risk intelligence firm. "The braking mechanism might be more on the South Korean side, given pre-election jockeying and the need for consultation between Korean business and political stakeholders," Truesdale said, noting Trump's desire for quick wins reflected in recent trade talks with Britain and China. South Korea's central bank said last month downside risks to this year's economic growth forecast of 1.5% had increased significantly due to U.S. tariffs.
The Print
15-05-2025
- Business
- The Print
Asia Pacific trade envoys to discuss multilateral cooperation in tariff era
The APEC trade envoys gathering comes amid growing protectionism triggered by Trump's tariffs, which have targeted more than half of the bloc. APEC accounts for about half of global trade and 60% of global GDP. Trade representatives of 21 member economies of the Asia-Pacific Economic Cooperation grouping will attend two days of meetings starting Thursday in South Korea's resort island of Jeju, as part of a second round of senior officials' meetings ahead of an annual APEC leaders summit later this year. By Jihoon Lee SEOUL (Reuters) -Asia-Pacific trade envoys will gather this week in South Korea for discussions on multilateral cooperation, with talks taking place at a time when countries are scrambling to respond to U.S. President Donald Trump's sweeping tariffs. Participants will attend closed-door sessions on broad topics ranging from multilateral trade to revitalisation and sustainability, with the official agenda expected to include the role and reform priorities of the World Trade Organization amid current global challenges. The officials are also expected to discuss other topics such as advancing the free trade area of the Asia-Pacific region, boosting digital trade, ramping up artificial intelligence readiness, and driving sustainable, inclusive growth. The Trump administration views the WTO as a body that has enabled China to gain an unfair export advantage and has recently moved to pause U.S. funding to the body. Last month, the WTO sharply cut its forecast for global merchandise trade from solid growth to a decline, saying U.S. tariffs and the spillover impact could lead to the heaviest trade slump since the height of the COVID pandemic. Trump has introduced high tariffs against rival China, neighbours Canada and Mexico, Asian allies Japan and South Korea, and several Southeast Asian countries including Vietnam, Thailand, Indonesia and Malaysia, among other trading partners. BILATERAL TALKS On the sidelines of the gathering, U.S. Trade Representative Jamieson Greer is scheduled to hold at least one bilateral trade talk with his South Korean counterpart on Friday. The gathering comes after the Trump administration signed its first bilateral trade agreement with Britain last week and agreed with China to lower tariffs significantly at their first face-to-face talks in Geneva on May 10-11. It was not clear who would represent Beijing at the gathering and whether there might be more bilateral meeting with the United States. Reuters has confirmed at least a third of the countries are sending their trade chiefs. In late April, when South Korea agreed with Washington to craft a trade package by July after an opening round of negotiations, Seoul said the meeting in Jeju would be an 'interim assessment'. 'There is scepticism we will see significant progress at the meeting, as there have not been substantive negotiations at the working level,' said Heo Yoon, a professor of international trade at Sogang University in Seoul. In the latest chapter of South Korea's ongoing political turmoil, Prime Minister Han Duck-soo, who had led negotiations as acting president, resigned earlier this month, followed swiftly by Finance Minister Choi Sang-mok, who took part in the opening round of talks as the country heads for a snap election. 'What South Korea will do at this stage is to make efforts to set an atmosphere where it can steer future negotiations to its advantage,' said Heo, who advises on trade talks. U.S. Commerce Secretary Howard Lutnick said in an interview with Bloomberg News last week that trade deals with South Korea and Japan 'are not going to be fast deals', as they were expected to take significantly more time to complete than the deal with Britain. To speed up negotiations, Washington and Seoul have agreed to bring all the proposed agendas to one table and discuss them altogether, rather than setting up separate working groups for each, one South Korean official told Reuters. 'It is likely the United States will also meet other countries at the gathering, so we will monitor those as we proceed with our own negotiations,' another South Korean official said. The Trump administration has initiated trade talks with many other APEC members, including Japan, Indonesia, Taiwan, and Vietnam, while other countries, such as Canada, Thailand and Malaysia, are also seeking negotiations. APEC is a regional non-binding economic forum established in 1989 to leverage the growing interdependence of the Asia-Pacific region, with its member 'economies' also including Hong Kong and Taiwan. (Reporting by Jihoon Lee; Editing by Ed Davies and Michael Perry) Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.
Yahoo
29-04-2025
- Automotive
- Yahoo
South Korea exports seen falling as Trump's tariffs start to weigh: Reuters poll
By Jihoon Lee SEOUL (Reuters) - South Korea's exports are expected to have fallen in April, as U.S. President Donald Trump's sweeping tariffs, including those on autos and steel, started to weigh, a Reuters poll found on Tuesday. South Korea is the first major exporting economy to report trade figures each month, providing an early look at the state of global trade. Exports out of Asia's fourth-largest economy are forecast to have fallen 2.0% this month from a year earlier, after a rise of 3.0% last month, according to a median of 22 economists in the survey conducted on April 23-28. That would be the first year-on-year loss in three months. In January, exports dropped 10.1%, which was aggravated by unfavourable calendar effects from the timing difference in Lunar New Year holidays. Trump imposed 25% tariffs on auto imports from April 3, after introducing 25% duties on steel imports from March 4. His 10% blanket tariffs also took effect from April 5, while higher "reciprocal" tariffs on major countries, including 25% duties on South Korea, are currently paused for 90 days. "The impact of tariffs is starting to show up, not only on soft data, but also on hard data," said Stephen Lee, an economist at Meritz Securities. Chun Kyu-yeon, an economist at Hana Securities, also said: "There is a possibility that the adverse effects of tariffs are starting to come into reality." "And, there will be further downward pressure from upcoming tariffs on auto parts and semiconductors as well as ongoing trade conflict between the U.S. and China," Chun added. Still, the chip sector, South Korea's biggest export item, remained resilient at least this month, likely providing some support to the headline figure, economists noted. In the first 20 days of this month, exports fell 5.2%, as automobiles and steel products dropped 6.5% and 8.7%, respectively, whereas semiconductors rose 10.7%. By destination, shipments to the United States dropped 14.3%, while those to China fell 3.4%. South Korean automakers are turning more pessimistic about the outlook for the sector due to tariffs, but chipmakers are optimistic amid robust demand, according to the country's central bank. Meanwhile, imports are projected to have fallen 7.0% in April, according to the survey. That would be the biggest drop since June 2024. The median estimate for the country's trade balance stood at a surplus of $4.35 billion, narrower than the previous month's $4.92 billion. South Korea is scheduled to report trade figures for April on Thursday, May 1, at 9 a.m. (0000 GMT). Sign in to access your portfolio
