Bank of Korea on High Alert Over U.S. Tariff Impact

The Bank of Korea is closely monitoring the potential economic fallout from the recently announced U.S. reciprocal tariff policy. Governor Rhee Chang-yong expressed concerns about the tariffs' potential impact on South Korea's economic growth, suggesting it could fall short of the projected 1.5%.

Potential for Escalating Trade Wars

Recent reports from the Bank of Korea highlight fears of escalating tariff wars, with the U.S. potentially imposing higher tariffs on major trade deficit countries, including China, until 2026. Such actions could provoke strong retaliatory measures from affected nations.

Need for Thorough Analysis

Governor Rhee emphasized the importance of a detailed analysis before drawing conclusions. "We are not AI. We need to further examine the impact of the 25% tariff," he stated, pointing to the need for patience and consideration of political developments.

Revised Growth Outlook on the Horizon

With the U.S. being one of South Korea's largest trading partners, the potential disruptions to trade flows could significantly impact South Korean industries reliant on exports. The Bank of Korea is expected to present a revised growth outlook in its upcoming Monetary Policy Direction Meeting.