"Trump's Tariff Shock Becomes Reality… Major Conglomerates Tighten Their Belts"
As trade tensions between the United States and China escalate, the burden on South Korean companies is growing heavier. Domestic firms are tightening their belts in an effort to survive amid prolonged global economic stagnation, including the so-called "Trump Storm." The global economy is now gripped by growing fears of a potential armed conflict between the two superpowers. In particular, Korean companies, caught between the U.S. and China, are increasingly facing the reality of external uncertainty. Exports to the U.S. have declined sharply, while Chinese companies, emphasizing cost-effectiveness, are aggressively targeting the Korean market—posing serious threats to profitability. According to industry sources on the 22nd, South Korean companies are accelerating internal restructuring to cope with the uncertainty surrounding U.S. President Donald Trump’s tariff policies. The steel industry, which was directly hit by Trump’s tariffs, has entered an emergency management mode. Last month, the Trump administration imposed a 25% tariff on steel and aluminum products. As a result, steel exports to the U.S. fell by more than 10% compared to the same period last year. The situation has worsened as the domestic market crumbles under a flood of low-priced Chinese steel imports, amplifying the damage to local companies. In response, POSCO Group has been expediting business restructuring following the inauguration of Chairman Chang In-hwa. POSCO has reduced investment in its hydrogen business and is reevaluating its strategy to overcome setbacks in its core steel and secondary battery businesses. This includes offloading non-core assets, downsizing or delaying certain operations, and shifting its overall business strategy. Instead of overextending itself with aggressive investments, the group plans to focus on internal stability and prepare for long-term survival while seeking out new opportunities. Hyundai Steel, the second-largest steelmaker in South Korea, entered emergency management mode on March 14. Following the shutdown of its rebar production line at the Incheon plant due to sluggish demand, the company has implemented a 20% salary cut for all executives. This marks the first time since its founding that Hyundai Steel has completely halted operations across its rebar production lines. In addition, the company carried out a voluntary retirement program for employees aged 50 and above, which concluded on the 18th. Earlier, Samsung Electronics instructed executives in certain divisions, including its network business, to fly economy class instead of business class on overseas trips and to use the same grade accommodations as regular employees. SK On, the battery affiliate of SK Group, also mandated that executives book economy class for business travel. These belt-tightening measures by major conglomerates come in the wake of sustained political instability following the declaration of martial law in early December last year, and growing concerns over a global economic downturn under the Trump administration. South Korea’s exports have plummeted in the aftermath of Trump's tariff policies. From April 1 to 20, South Korea’s exports totaled $33.9 billion, marking a 5.2% decrease ($1.87 billion) compared to the same period last year. Notably, the number of working days (15.5 days) remained the same as the previous year, highlighting the gravity of the decline. Among South Korea’s top 10 export categories, all but semiconductors (-10.7%) showed a drop: passenger cars (-6.5%), steel products (-8.7%), petroleum products (-22.0%), and auto parts (-1.7%). Semiconductors have not yet been targeted by U.S. tariffs. By destination, exports to the United States dropped sharply by 14.3%. Exports to China (-3.4%) and Vietnam (-0.2%) also declined, while shipments to the European Union (+13.8%) and Taiwan (+22.0%) increased. Imports during the same period amounted to $34.0 billion, down 11.8% ($4.57 billion), resulting in a trade deficit of $100 million as imports exceeded exports. An industry official stated, “Korean companies are focused on cost-cutting to survive the prolonged trade tensions with the U.S. and the global economic slump,” adding, “Strategic collaboration among domestic companies is also expected to expand to strengthen competitiveness in the global market.” ChatGPT를 사용하여 번역한 기사입니다.
