South Korea's Yoon praises Trump in phone call as trade officials brace for tariffs (updated)

HD Hyundai Heavy Industries Co

07/11/2024 24:43

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      Yoon moves to cement personal ties with US president-elect
    

        * 
      South Korea prepares for economic impact of Trump policies
    

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      Yoon and Trump discuss North Korea and security
cooperation
    

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      South Korea's shipbuilding industry sees potential boost
    

  
 (Recasts, adds trade discussions in paragraphs 1, 5-15)
    By Joyce Lee and Cynthia Kim
       SEOUL, Nov 7 (Reuters) - South Korean President Yoon Suk
Yeol spoke with Donald Trump on Thursday and congratulated him
on winning the U.S. presidency on the "Make America Great Again"
slogan as officials in Seoul worked to prepare for "significant"
economic changes. 
    Yoon and Trump held a 12-minute phone call and discussed the
close security and economic ties of their two countries across
all areas, a senior South Korean official said on Thursday.
    South Korea's ambassador to the United States will also
visit Trump's Mar-a-Lago home in Florida to meet with members of
the president-elect's camp, Yonhap news agency reported, citing
diplomatic sources. 
    Trump's election has renewed attention in South Korea to his
"America First" foreign policy plans and how his unpredictable
style will play out in his second term. 
    South Korean officials worked past midnight on Wednesday to
prepare for changes expected from U.S. policies, with the Bank
of Korea and think tanks seeing a potential hit to exports if
the U.S. hikes tariffs. 
    Meetings at the trade ministry that began in the hours after
Trump's victory led to back-to-back discussions early on
Thursday as South Korea's economic chiefs weighed the impact on
exports of tariff levels floated by Trump ahead of the election.
    "Should policy stance that has been stressed by
president-elect Trump become realized, the impact on our economy
is expected to be significant," Finance Minister Choi Sang-mok
said at a 7:30 a.m. (2230 GMT on Wednesday) meeting with trade
and foreign ministers in Seoul. 
    South Korea would probably suffer less than China, Mexico
and the European Union, but Asia's fourth-largest economy could
be forced into another renegotiation of its bilateral free trade
agreement with Washington, according to Kim Young-gui, an
economist at the Korea Institute for International Economic
Policy (KIEP). 
    "Trump's main target would be the countries that are making
surplus in bilateral trade. So Seoul could be asked to re-do the
deal again once Washington is done with renegotiating the USMCA
(U.S.-Mexico-Canada Agreement)," Kim said. 
    
    ECONOMIC BLOW
    South Korea's exports could fall a cumulative $44.8 billion
over several years, shrinking its economy an estimated 0.67%,
should Trump follow through with his pledge to impose universal
tariffs, a report by the KIEP said last week. 
    Trump has pledged to impose tariffs of as much as 60% on
China and a universal 10% tariff on imports from all countries. 
    China and the U.S. are South Korea's top two trading
partners because of its focus on chips, cars and petrochemicals.
    Deputy National Security Adviser Kim Tae-hyo said Trump
noted South Korea's success in shipbuilding and vessel
maintenance during the call with Yoon, and said he looked
forward to discussing how South Korea could aid the American
shipbuilding industry. 
    Hana Securities analyst Wee Kyung-jae said Trump's comment
likely reflected the weakness of the U.S. shipbuilding industry,
which is unable to meet the demands of commercial shipping and
the U.S. Navy. 
    Shares in shipbuilders HD Hyundai Heavy Industries
 329180.KS  and Hanwha Ocean  042660.KS  rose more than 10%,
while Samsung Heavy Industries  010140.KS  gained 9%, after
Trump's comment was reported. 
       
    ALLIANCE QUESTIONS
        Yoon and Trump also shared concerns over North Korea's
deployment of troops to Russia in its war against Ukraine and
its continued military provocations such as ballistic missile
launches, Deputy National Security Adviser Kim told reporters. 
    "They shared the view they need to discuss these issues in
person and agreed to meet at an early time once they are able to
set a date and location."
    The U.S. election and Trump's run for a second term have
been watched closely in South Korea. Yoon has pushed for closer
security ties with Washington and for greater three-way
cooperation together with Japan. 
    Yoon told Trump the success of three-way cooperation between
South Korea, Japan and the United States was due in part to the
foundation laid by Trump's first presidency. 
    Trump has accused South Korea, a key Asian ally, of getting
a "free-ride" on U.S. military power and demanded it pay far
more of the cost of keeping American troops in the country to
counter the threat of aggression by North Korea. 
    On Monday - a day before the U.S. election - South Korea and
the Biden administration signed a five-year plan under which
Seoul agreed to an 8.3% jump in its 2026 contribution to the
cost of maintaining U.S. bases in the country to 1.52 trillion
won ($1.09 billion), with future increases capped at 5%. 
        Later on Thursday at a news conference, Yoon pledged to
strengthen the alliance spanning economic and technological
cooperation on the global stage. 
    "We will be building a perfect security posture together
with the new administration in Washington and safeguard our
freedom and peace," he said. 
    
    ($1 = 1,396.3600 won)
    

 (Reporting by Joyce Lee, Hyonhee Shin, Hyunsu Yim, Jihoon Lee;
Writing by Jack Kim and Josh Smith; Editing by Ed Davies and Tom
Hogue)
 ((jack.kim@thomsonreuters.com; +822 6936 1455;))